Weekly Round-up (2 Sept – 8 Sept 2019)
Action continued in the international payments and fintech universe during the week of 2-8 September with Australia’s competition commission warning that Australians paying millions too much for foreign currency services, the CEO of Japanese financial services giant SBI group emphasizing on deeper engagement with Ripple’s XRP for international payments, the world’s most valuable fintech company Stripe announcing its foray into lending and the UK challenger bank Revolut announcing plans to ramp up of customer support.
ACCC Report Warns Australians Paying Too Much for Foreign Currency Services
- A recent report by the ACCC has found that Australians lose millions on international transfers
- Australian use the Big Four instead of inexpensive international money transfers service alternatives
- ACCC report identifies InstaReM as one of the most cost-effective IMT service in Australia
A recent report by the Australian Competition & Consumer Commission (ACCC) has found that Australians lost A$150 mn (US$102 mn) on international transfers. This is because consumers use the Big Four Australian banks instead of inexpensive international money transfers service alternatives. In some circumstances, Australians are paying 30% more than those in the US for the same service. A customer transferring $10,500 to the US could save up to $550 by using the cheapest provider. In one of the few bright spots, the ACCC noted that the entry of new competitors into the market has helped give customers more choice. The arrival of fintechs like InstaReM, has undercut incumbents with greater transparency hopefully driving fees lower. As per the ACCC finding, InstaReM is the most cost-effective IMT service in Australia for sending USD 200 overseas and the second-best for sending USD 7,000.
SBI Group to Engage Deeper with Ripple on More Use Cases in Payments Space
- SBI Holdings is reportedly planning to use the digital asset XRP to power global payments
- SBI Group is focusing on making Moneytap into the Group’s flagship product
- Ripple might also join in to become a MoneyTap shareholder
Japanese financial giant SBI Holdings is reportedly planning to use the digital asset XRP to power global payments. While speaking at the FIN/SUM 2019 event in Tokyo, the head of SBI financial behemoth Yoshitaka Kitao stated that the SBI group plans to deepen its engagement with the crypto giant Ripple. Among those will be the use of XRP for remittance services. Kitao said the SBI Group is focusing on making Moneytap into the Group’s flagship product. SBI was considering the integration of XRP with MoneyTap and Kitao too agreed with it. SBI believes the use of MoneyTap can resolve issues such as initial installation costs for its member stores and other issues ailing users of its services. As SBI-Ripple move forward with their partnership, Ripple might also join in to become a MoneyTap shareholder. SBI Holdings is one of the biggest banks involved in cryptocurrency. Ripple and SBI launched the MoneyTap payment application powered by XRP and Ripple’s xCurrent technology last year.
Fintech Startup Stripe Launches Lending Arm
- Stripe is getting into lending, with the launch of Stripe Capital
- It will extend loans to existing Stripe customers and merchants selling on services like Shopify
- Stripe will be focusing on loans of $10,000 to $20,000 to start with
- The company will use its own data, such as payment history, to determine creditworthiness
San Fransisco-based Stripe, one of the most valuable financial-technology startups helping businesses accept online payments, is getting into lending, with the launch of Stripe Capital last week. The lending service will start in the US and will make loans to businesses that are already Stripe customers, as well as merchants selling on services like Shopify that use Stripe to process payments. The first target market will be smaller businesses that use Stripe. Stripe Capital will start out by focusing on loans of about $10,000 to $20,000. The company intends to use its own data such as payment history, rather than credit scores, to determine creditworthiness. Eligibility will be determined based on a company’s history on Stripe, with algorithms analysing relevant signals for each business, including payment volume, percentage of repeat customers, payment frequency, and changes in revenue growth. Stripe, whose rivals including Jack Dorsey’s Square and Netherlands-based Adyen, makes software that allows businesses to accept payments over the internet.
Revolut Expands into Portugal with New Customer Operations Center in Porto
- To support its growth, Revolut plans to open a customer operations centre in Portugal
- The Portugal office to have staff across customer support, complaints, investigations & compliance roles
- Revolut has 250,000+ customers in Portugal and targets to open 1,000 new accounts each day
UK Fintech startup Revolut has been growing fast and has 6 mn customers. To scale its support team accordingly, Revolut announced plans to open a customer operations centre in Porto, Portugal. A proportion of these staff (70) have already been hired for the new office, with plans to hire a further 330 in roles across customer support, complaints, investigations and compliance. Construction is currently underway at the site, with plans for it to be completed by the end of this year. Revolut has 250,000+ customers in Portugal and targets to open 1,000 new accounts each day. Revolut has appointed Ricardo Macieira, the former country manager for Airbnb in Portugal, as growth manager, responsible for developing Revolut’s business in the country. It has also hired Rebeca Venâncio who will head the firm’s public relations. She joins from Microsoft in Portugal. Revolut’s founder and CEO Nik Storonsky said that Portugal is emerging as a key Fintech hub in Europe and they are proud to be part of that movement.
Weekly Round-up (26 Aug – 01 Sept 2019)
The international payments / money transfers & fintech universe witnessed continued action during the week of 26 August-01 September with global money transfer giant MoneyGram announcing a partnership with a Vietnamese bank, crypto giant Ripple signing one of the top 10 banks in the US to use blockchain payment technology, Singapore-based cross-border payments firm TranSwap acquiring money remittance license from Bank Indonesia, European digital money transfer service Azimo announcing expansion of its service across Asia as the firm reaches profitability, a new UK-based fintech startup SympliFi launching cross-border remittance platform and European fintech Raisin acquiring Fairr, a German startup disrupting the pensions industry.
MoneyGram Announces New Home Delivery Partnership with HD Bank
- MoneyGram partners with Vietnam’s HD Bank to provide home delivery service
- Customers in urban areas will receive the money within 3 hours if the transaction is done before 10:30 am
- For customers in suburban and rural areas, money can be received on the same day or the following day
Global cross-border money transfer giant MoneyGram has announced a new partnership with HD Bank in Vietnam to provide convenient home delivery service. This move is in line with the company’s omnichannel strategy with which it is currently providing smooth and convenient remittance plus payment services. MoneyGram already has a home delivery network in Vietnam, but teaming with HD Bank offers customers more confidence money will arrive on time. Customers in urban areas using HD Bank’s home remittance service through MoneyGram will receive the money within three hours if the transaction is done before 10:30 am local time. For those living in suburban and rural areas, money can be received on the same day or the following day. Remittances to Vietnam last year reached US$ 18.9 bn, a year-on-year increase of 37%. Vietnam is among the top 10 countries in the world and second in Southeast Asia after the Philippines in terms of inbound remittances.
PNC Becomes the First US Bank Using RippleNet for Cross-Border Payments
- PNC Bank joins RippleNet to tap blockchain solution for cross-border payments & settlement
- The bank will be able to drastically cut its cross-border payment waiting times with RippleNet
- PNC’s adoption of blockchain paves the way for greater adoption of DLT in banking & finance
A division of PNC Bank – a top ten bank in the US with over US$400 bn in assets – has officially joined RippleNet, to tap its blockchain solution for cross-border payments and settlement. The bank will be able to drastically cut its cross-border payment waiting times with RippleNet. Fee is also expected to go down for similar transactions. PNC Treasury Management has implemented Ripple’s blockchain technology, allowing its US-based commercial clients to instantly receive payments from overseas buyers against their invoices. This is expected to help the clients transform the management of their global account receivables and better manage their working capital. PNC’s adoption of blockchain paves the way for greater adoption of DLT in the banking and finance world. It also highlights that emerging technology has a serious upside potential over the legacy banking systems.
TranSwap Gets Regulator Approval to Launch Remittance Services in Indonesia
- TranSwap obtains its money remittance Fund Transfer Operator license from Bank Indonesia
- The company will offer cross-border payments in its third Asian location, after SG and HK
- It plans to target Indonesian businesses, including SMEs and e-commerce companies
Cross-border payments platform TranSwap announced last week that it has obtained its money remittance Fund Transfer Operator license from Bank Indonesia, which will enable them to provide services for outbound cross-border payments in its third Asian location, after Singapore and Hong Kong. With this approval, TranSwap plans to launch inter-country fund transfers for Indonesian businesses, which includes SMEs and e-commerce companies within the next 1 month. TranSwap also allows businesses to fulfill payments overseas at midmarket exchange rate through its proprietary transaction portal. Payments can be tracked in real time with end-to-end status updates. SMEs may also choose to integrate with TranSwap’s API for full automation of multiple fund transfers.
Azimo Appoints New CEO as Firm Reaches Profitability; Aims for Asian Expansion
- Azimo has reached profitability and will be expanding its services across Asia
- Co-founder Michael Kent steps down as CEO; COO Richard Ambrose appointed new CEO
- Azimo has grown 60% for year ended June 2019, fueled by expansion into Africa and SE Asia
European digital money transfer service Azimo has announced that it will expand its services across Asia – the largest money transfer market in the world. The comapny has also appointed its COO Richard Ambrose as the new CEO after Michael Kent stepped down from the role. However, more noteworthy fact is that the personnel changes coincide with the company announcing that it reached profitability during Q2 this year. The fintech stated that it has grown over 60% year on year ended June 2019. The growth was fueled in part by an expansion of services in Africa and Southeast Asia. Azimo claims to be one of the most successful Fintechs to emerge out of the UK Fintech ecosystem having serviced over a million customers transferring over US$2 bn. It has raised US$50 mn in investments to date. According to outgoing chief executive Michael Kent, taking the firm public is “definitely the thing that we’d like to do”.
New Fintech SympliFi Rolls Out New Cross-Border Remittance Platform
- SympliFi launches remittance platform to offer migrants easier access to financial solutions
- The company will help customers to access loans from local banks without incurring additional fees
- It will also help customers to build their credit history
SympliFi, a UK-based financial technology startup, has announced the launch of its FinTech platform designed to empower diaspora around the world with easier access to financial solutions that go far beyond the traditional remittance / money transfer model. According to the company, the service will help families of the customers to access loans from local banks without incurring additional fees. It will also help customers to build their credit history. SympliFi’s services currently extend to Zimbabwe, Nigeria and Tanzania with the addition of new countries and lending partners across the globe. Based in London, SympliFi traditionally provides remittance and money transfer services and intends to provide insurance and bill payments services in near future.
Raisin Acquires Digital Pension Provider Fairr
- European fintech Raisin has acquired Fairr, a German startup disrupting the pensions industry
- The acquisition price is reportedly in the “double-digit Euro millions” range
- Raisin becomes the only platform to offer savings, investments & pension products with single registration
Raisin, the fintech startup that offers a pan-European marketplace for savings and investment products, has acquired Fairr, a German startup disrupting the pensions industry. Terms remain undisclosed, although the price was reportedly in the “double-digit Euro millions” range. The deal was mostly done in cash, with some investors in Fairr getting a mix of cash and stock in Raisin. Raisin, which has secured US$206 mn in funding to date, including US$142 mn across two rounds in 2019, says the acquisition is part of its strategy to enter Europe’s €12 tn (US$13.3 tn) pension and retirement savings market. Through this acquisition, Raisin will become the only platform worldwide to offer its customers access to savings, investments and pension products — all on one online marketplace with one simple registration. Raisin now counts 200,000 customers across 31 European countries, with a US launch scheduled for 2020.
Weekly Round-up (19 Aug – 25 Aug 2019)
Action continued in the international payments / money transfers & fintech universe with UK-based Xendpay announcing to join the RippleNet to open up new corridors into Asia, Swiss fintech startup Numbrs joining the Unicorn club with a new €36 million funding round, reports of Facebook’s messaging service WhatsApp in talks with Indonesian digital payment firms to offer its mobile transaction services, Spanish banking giant Santander Group planning to establish a new payments corridor in Latin America using Ripple’s xCurrent solution and the App-based UK bank Monzo launching its ‘Get Paid Early’ feature enabling account holders to receive their salaries a day early.
Xendpay to Join RippleNet to Open Up New Corridors into Asia
- UK-based international money transfer firm Xendpay is joining the RippleNet
- This is being done to open up new corridors to Bangladesh, Malaysia, Philippines, Vietnam, and Indonesia, as well as enable real-time payment rails to Thailand
- The move will also allow Xendpay to compete by offering low-cost remittance services
Cryptocurrency giant Ripple reported last week that Xendpay, UK-based international money transfer firm, is joining the RippleNet (which connects over 200 banks and payment providers for cross-border remittances) to open up new corridors to Bangladesh, Malaysia, Philippines, Vietnam, and Indonesia, as well as enable real-time payment rails to Thailand. The move will also allow Xendpay to compete by offering low-cost remittance services. Xendpay joins other organizations that are as of now utilizing Ripple’s product over their payment services like Standard Chartered Bank, MoneyGram, American Express, and InstaReM. The use of RippleNet has been triggered by Xendpay’s need to make cross-border transactions in smaller currencies, which previously called for direct partnerships with local banks and complex API arrangements. Xendpay operates in countries with established and growing migrant communities, including the U.K. and Europe, as well as Canada, South Africa and India. Other customers include students needing to pay tuition fees and receive funds to cover living costs, as well as small online businesses who buy and sell goods from other countries.
Swiss Fintech Numbrs Joins the Unicorn Club With US$40 mn Funding Round
- Zurich-based Numbrs raised US$40 mn at a valuation of US$1 bn+, joining the Unicorn club
- The latest investment brings Numbrs’ total raise to date to almost US$200 mn
- Numbrs does focus on VC and PE funding, but relies mostly on individuals and families
The Zurich-based fintech raised US$40 mn at a valuation of over US$1 bn, reported Bloomberg. The latest investment brings Numbrs’ total raise to date to almost US$200 mn. Notably, in contrast to many of its peers, Numbrs has joined the unicorn club not by focusing on VC and PE funding, but instead by relying mostly on individuals and families — 50 have invested in the company thus far. The new funding will be used for expansion in Europe, notably the UK. According to Numbrs founder Martin Saidler, VC and PE funds tend to have less patience and they get nervous when it takes longer for a startup to earn money. Launched in 2014 in Germany, Numbrs offers an account aggregation app and provides users with the opportunity to apply for bank accounts, credit cards, loans and insurances directly within the app from a panel of banks and insurers.
WhatsApp Looks to Launch Mobile Payments Service in Indonesia: Report
- Facebook’s messaging service WhatsApp is in talks with Indonesian digital payment firms
- Indonesia could become the second country where WhatsApp introduces such services
- WhatsApp will serve as a platform in Indonesia supporting payments via local digital wallets
Social Media giant Facebook’s messaging service WhatsApp is in talks with multiple Indonesian digital payment firms to offer their mobile transaction services, in a bid to tap the nation’s fast growing e-commerce sector, according to Reuters. Indonesia could become the second country worldwide where WhatsApp introduces such services, as it awaits regulatory approval from India, its biggest market by users, that has been delayed due to local data storage rules. But unlike in India where it plans to offer direct peer-to-peer payment services, WhatsApp will simply serve as a platform in Indonesia supporting payments via local digital wallets due to tough licensing regulations. The messaging service is in talks with multiple Indonesian digital payments firms including DANA, OVO, and ride-hailing startup Go-Jek. According to Reuters’ sources, deals with these three firms “are expected to be finalised shortly.” The report further speculates that Facebook’s dealings in Indonesia could become a template that they later use to dodge local regulations, pertaining to bans on foreign digital wallets.
Santander to Bring Ripple-Powered App to Latin America
- Spain’s Santander Group plans to establish a new payments corridor in Latin America
- Customers in Latam countries will be able to make instant payments to the US via One Pay FX, a mobile app that uses Ripple’s xCurrent software
- Currently, only customers in the UK and Spain can send money to the US through One Pay FX
The Spanish banking giant Santander Group plans to establish a new payments corridor in Latin America allowing countries to make instant payments to the US using Ripple’s xCurrent payment solution. The bank is building a “payment corridor” that would let customers in Latin America send money to the US instantly for free via One Pay FX, a mobile app that uses Ripple’s xCurrent software. Citing rising transaction volume, Santander wants to expand Ripple’s xCurrent technology to a number of Latin American countries after first introducing the technology in Spain, Brazil, Poland and the UK in April 2018. To date, only customers in the U.K. and Spain can send money to the U.S. through One Pay FX. Santander’s One Pay FX transaction volumes tripled from January 2019 to June 2019. The launch of One Pay FX in the Latin America nations date has not been communicated. Santander is also working to lure non-Santander customers with another xCurrent-based international payment product called ‘Pago FX’.
Monzo Launches ‘Get Paid Early’ for All Customers
- Monzo has launched short-term loans under ‘Get Paid Early’ for its 2.5 mn customers
- Customers will be able to borrow as much as £15,000 for up to 60 months, or take loans as small as £200 for as little as 90 days.
- The (salary) payment will come into a customer’s account at 4pm the day before they get paid
UK digital bank Monzo has formally launched short-term loans for its 2.5 mn customers last week, following a trial with around 4,000 of its users. Those who qualify will be able to borrow as much as £15,000 for up to 60 months, or take loans as small as £200 for as little as 90 days. Using the new feature, if you receive a salary payment via BACS credit (which 90% per cent of the UK population do), the payment will come into a customer’s account at 4pm the day before they get paid, instead of at midnight. Monzo is able to offer it because it can be confident the money will actually arrive into your account because it can see the money coming into the system. Monzo is not charging for Get Paid Early, instead it’s offering it for free to all customers, regardless of their account standing or creditworthiness. While this represents the neobank’s first full foray into the consumer credit market, Monzo has offered overdrafts since last year, charging customers £0.50 per day when overdrawn by £20 or more. The service covers all Bacs payments, including student loan payments and tax credits. Bacs processed more than 2.1 bn payments in 2018, including 351 mn pay packets.
Weekly Round-up (12 Aug – 18 Aug 2019)
The international payments / money transfers & fintech universe witnessed continued action last week with the UK fintech TransferWise launching debit card in Australia and New Zealand, UK fintech bank Monzo starting to offer flexible loans & the fellow digital bank Revolut launching a new Expense Management tool, Western Union announcing cross-border payment partnership with Philippine’s BDO Unibank & its competitor MoneyGram revamping its Web Platform and the fellow money transfer giant and the Thai payment services provider 2C2P launching a new cross-border remittance service.
TransferWise Launches Debit Card in Australia & New Zealand; Singapore to Follow
- TransferWise’s Platinum Debit Mastercard is now available in Australia and New Zealand
- The debit card allows users to spend, receive and convert currencies with low fees
- The card is claimed to be 11 times cheaper than popular bank travel debit & prepaid cards
International money transfer startup TransferWise’s debit card is now available in Australia and New Zealand, with a Singapore launch expected by the end of this year. TransferWise’s debit card was first launched in the UK & Europe last year before getting launched in the US in June. The TransferWise debit card is part of its multi-currency account, which allows users to spend, receive and convert currencies with what Transferwise claims to be low fees. The card is called the TransferWise Platinum Debit Mastercard which, according to firm, is 11 times cheaper than many popular bank travel debit and prepaid cards and offers significant savings for card holders. Banks and money transfer companies charge their own markup on top of the real exchange rate when converting money for customers, which is costing Australians millions of dollars a year. The TransferWise Platinum Debit Mastercard is also available for businesses. It already has a user base over 250,000 in the UK, US, and Europe.
Monzo Starts Offering Loans to Current Account Customers
- Monzo to charge interest rates between 3.7pc and 6pc for loans of £7,500 to £15,000
- The interest rates will be between 6pc and 20.4pc for loans of £200 to £7,499
- Monzo has built systems that check if customers can borrow and how much it can lend
App-only bank Monzo has launched its first range of personal loans, targeting customers who are alienated by the lack of transparency at high street providers. The digital bank will charge customers interest rates of between 3.7pc and 6pc for loans of £7,500 to £15,000, rising to between 6pc and 20.4pc for loans of £200 to £7,499. Loans of up to 60 months are available. That kind of wage top-up has been the hallmark of short-term or payday lenders, whose customers borrow an average of £300 over three months. But while payday lenders usually hit customers with interest charges equal to an annual percentage rate (APR) of 1,000%, Monzo is charging a maximum 24% APR on loans up to £7,500. Monzo, valued at £2 billion, also reported that it has built systems that check if customers can borrow money and how much it can responsibly lend. The offering has been developed entirely in-house.
Revolut for Business Releases Expense Management Tool
- The Expense Management Tool is designed to help businesses
- Revolut’s simple and intuitive tool ensures no card expenses are unaccounted for
- The new tool enables business owners to easily approve or reject team expenses
Revolut for Business launched a new Expense Management Tool last week, which is designed to help growing businesses by removing the hassle from handling expenses. The fintech has created a simple and intuitive tool with everything in one place, ensuring that no card expenses will be unaccounted for. The new tool enables business owners to easily approve or reject team expenses, an area that has traditionally been difficult to manage. These processes are often prone to error, time-consuming and require businesses to manually import and match data across multiple tools. The Expense Management feature is available to freelancers and businesses on paid plans. As part of this feature launch, Revolut has also improved its integration into small business accounting platform Xero. The new Expense Management feature reaffirms Revolut’s strategy to help businesses get off the ground and to save entrepreneurs around the world time and money with a radically better business account.
BDO Unibank, Western Union Ink Cross-border Payment Partnership
- WU & BDO Unibank have extended their partnership to expand reach in the Philippines
- With this, 1,100+ BDO Unibank branches will now serve as Western Union agents
- Those without BDO bank accounts will also be able to receive money at Unibank branches or its subsidiary, One Network
The Western Union Co and BDO Unibank have extended their relationship to expand reach in the Philippines. As per the pact, more than 1,100 BDO Unibank branches will now serve as Western Union agents providing international money transfer services across the world. Customers not having bank accounts at the BDO Unibank will also be able to receive money at any of the Unibank branches or its subsidiary, One Network, which has over 130 branches in Mindanao and the Visayas, to receive money from their loved ones. Until now, one could only receive money directly into their BDO Unibank accounts. The Philippines was ranked world’s fourth largest remittance recipient in 2018, according to the World Bank.
MoneyGram Online Launches Redesigned Web Platform
- WU & BDO Unibank have extended their partnership to expand reach in the Philippines
- With this, 1,100+ BDO Unibank branches will now serve as Western Union agents
- Those without BDO bank accounts will also be able to receive money at Unibank branches or its subsidiary, One Network
MoneyGram has launched its redesigned online platform in the United States, named MoneyGram.com. The revamped platform is more customer centric, efficient, has personalization options and other convenient features, which would provide a seamless service to its customers. The redesign creates a better user experience for customers to send money anytime to over two billion bank accounts and mobile wallets or to any MoneyGram location in more than 200 countries and territories. The redesigned website will also provide access to estimated transfer fees and facilitate money transfer planning. The new platform is available across all 24 websites in different parts of the world. The platform leverages its digital and physical network, global financial settlement engine, cloud-based infrastructure with integrated APIs, and compliance program.
2C2P Introduces Easy2send Cross-border Remittance Service
- 2C2P’s remittance service will enable money transfers between Thailand & any country
- Users can make remittance requests at more than 10,000 payment locations in Thailand
- The money will be transferred into the recipient’s bank accounts and mobile wallets
Thailand-based payment services provider 2C2P has launched a new cross-border remittance service called easy2send to enable money transfers between Thailand and any country. Users can make remittance requests at more than 10,000 payment locations in Thailand. The receivers will get funds in real-time and not later than the next working day based on the country. The money will be transferred into the recipient’s bank accounts and mobile wallets. Fees start from as low as 99 Baht. Thailand is home to more than 2.1 mn foreign workers and over 90% of them are Myanmar, Lao and Cambodian nationals. The number of expats in Thailand has also jumped significantly recently with Japanese expats constituting the biggest increase of 4% from the previous year. This service is being governed under the remittance license from the Central Bank of Thailand.
Weekly Round-up (05 Aug – 11 Aug 2019)
Action continued in the international payments / money transfers & fintech universe last week with the Ripple CEO indicating crypto giant eyeing ‘multiple’ deals after MoneyGram investment, US stock trading app Robinhood receiving regulatory approval to operate in the UK, Swedish online payments firm Klarna raising US$ 460 mn in a funding round, Western Union partnering with the Association of Canadian Travel Agencies, Mastercard announcing to buy a majority stake in the Scandinavian payments group Net and US Federal Reserve announcing plans to develop a new 24×7 real-time payment and settlement services to support faster payments.
Ripple Eyeing More Deals After MoneyGram Investment
- Ripple is working on multiple potential investments & acquisitions post US$30 mn investment in Moneygram
- MoneyGram announced it began using xRapid transaction product
- Ripple is expecting 100 new contracts to be signed over the rest of this year
Brad Garlinghouse, the CEO of cryptocurrrency major Ripple, said last week that his company is working on “multiple” potential investments and acquisitions in the wake of a US$30 mn investment in money transfer business Moneygram. Garlinghouse added the company is in a very strong position, its business is growing strongly and they have a strong balance sheet. “Anything we can do to accelerate our growth and give us more capabilities that serve customer needs is a good place to be,” he said. Ripple’s 10% equity stake in MoneyGram appears to have paid off. Last week, MoneyGram announced it began using xRapid transaction product to maintain liquidity when making international transfers. With the use of the xRapid tool, MoneyGram is looking to help speed up the speed of payment processing. Ripple is expecting 100 new contracts to be signed over the rest of this year.
US Stock Trading App Robinhood Gets UK Broker License
- Robinhood has received the FCA’s approval to operate as a broker in the UK
- The company will compete with Hargreaves Lansdown & the upstart stock broker Freetrade
- It has appointed ex-TransferWise executive Wander Rutgers as President of its UK biz.
Robinhood, the US-based commission-free stock trading app recently valued at US$7.6 bn, has received the Financial Conduct Authority (FCA)’s regulatory approval to operate as a broker in the UK, making its plans to set up shop in London. The platform currently lets users buy a host of US stocks, and the firm plans to offer European shares, ETFs and stocks over time. Robinhood will compete with Hargreaves Lansdown, which charges up to £11.95 per order, as well as the upstart stock broker Freetrade. London-based Robinhood Int’l can be considered as the first step of Robinhood expansion to other countries and cities. Robinhood has appointed Wander Rutgers as President of its UK operations. He joins from fintech Plum where he headed the startup’s investing and savings product, and prior to that he led product, compliance and operations teams at TransferWise. The firm is now hiring to fill out other roles spanning compliance, user research, marketing and operations.
Swedish Fintech Klarna Valued at US$5.5 Bn in Funding Round
- Klarna has raised US$460 mn in its latest funding round, giving it a valuation of US$5.5 bn
- The new funding will be used to grow its presence in the US payments market
- Klarna is known for its investment relationship with Calvin Broadus, aka Snoop Dogg
Swedish online payments firm Klarna, which has won a growing following with its ‘buy now, pay later’ service for shoppers, has raised US$460 mn in its latest funding round. Investors led by Dragoneer Investment Group, gave Klarna a post-money valuation of US$5.5 bn. This makes it one of the most highly-valued private fintech companies in the world. The new funding will be used to help Klarna continue to grow its presence in the US payments market. Klarna has taken on incumbents in the retail and payments industries by offering customers the option to pay for purchases in increments over time, without paying interest. Klarna’s biggest existing shareholders, including Sequoia and Bestseller, invested more than US$100 mn earlier this year. It had raised a total of US$775 mn prior to the latest funding round. Klarna is known for its investment relationship with Calvin Broadus, better known as Snoop Dogg, who is front-and-center in Klarna’s recent marketing campaign, known as “Smoooth Dogg.”
Western Union Enables Cross-Border Payments for ACTA, Robert Dyas
- The ACTA is collaborating with Western Union to make cross-border payments easier
- This gives 12,000+ ACTA members an opportunity to use WU’s services
- Over four-fifths of travel spending reserved via a travel agency in Canada is handled by an ACTA member
The Association of Canadian Travel Agencies (ACTA) is collaborating with Western Union to make cross-border payments easier. The collaboration gives the 12,000+ ACTA members an opportunity to use Western Union’s foreign currency transactions and currency risk management services. A unit of the Theo Paphitis Retail Group chain, Robert Dyas will enable global money transfers to more than 200 countries through Western Union. Customers can make the fund transfers from more than 90 Robert Dyas stores in the UK. They can either start the transaction on the Western Union mobile app and make the payment in-store or complete the entire payment in-person at the retail outlets. Over four-fifths of travel spending reserved via a travel agency in Canada is handled by an ACTA member.
Mastercard Buys Real-Time Payments Unit from Nets Group for US$3.2 Bn
- Mastercard to buy a majority stake in Scandinavian payments group Nets for US$3.19 bn
- The acquisition includes the clearing and instant payment services & e-billing solutions
- Mastercard has already spent US$1.1 bn this year on acquisitions
Payments processor Mastercard will buy a majority stake in the corporate services businesses of Scandinavian payments group Nets for about €2.85 bn (US$3.19 bn), furthering its push into the Nordic markets. The acquisition includes the clearing and instant payment services, and e-billing solutions of Nets’ corporate services business. The acquisition furthers the Mastercard’s continued strategy to move well beyond cards and deepen its presence in account-to-account activity and extend its position beyond credit and debit cards. The acquisition from Nets is expected to close in the first half of 2020 and will likely be dilutive for up to two years after the deal closes. Mastercard has already spent US$1.1 bn this year on acquisitions and strategic equity investments as the firm sought to push into new markets and develop additional forms of electronic payments.
Fed Unveils Plan for Real-Time Payments System
- The US Federal Reserve Banks will develop a new real-time payment & settlement service
- To called the FedNow℠ Service, the service is expected to support faster payments in the US
- The move is not popular with big US banks, who have invested US$1 bn in their own system
The US Federal Reserve Board announced last week that the Federal Reserve Banks will develop a new round-the-clock real-time payment and settlement service, called the FedNow℠ Service, to support faster payments in the US. The US central bank said it was seeking public comment on the project, saying near-instantaneous transfer of funds 24 hours a day could yield economic benefits for individuals and businesses. The new service would operate alongside a private real-time payments system established by a group of large banks in 2017. The new government system would allow paychecks, bill payments and other consumer transactions to happen immediately instead of relying on the current system that closes on weekends and sometimes takes days to complete a transaction. The move isn’t popular with big US banks, which have invested about US$1 bn in their own system, but community banks and big retailers such as Walmart are in favor. American Banker noted that the “announcement ended years of uncertainty about whether the central bank would take a hands-on role in a modern US payments network or instead defer to the private sector.”
Weekly Round-up (29 Jul – 04 Aug 2019)
The week of 29 July-04 August saw continued action in the international payments / money transfers & fintech universe with money transfer giant MoneyGram’s Q2 report confirming use of XRP token to facilitate cross-border settlements, the fellow money transfer giant Western Union announcing 10% staff cut after missing on Q2 earnings, the UK challenger banking fintech Revolut launching its own Robinhood-style commission-free stock trading platform and Singapore-headquartered SME neobank Aspire raising US$32.5 mn in Series A funding round. Meanwhile, two of the three multibillion-dollar payment mergers – FIS’ US$43 bn acquisition of WorldPay and Fiserve’s US$22 bn acquisition of First Data – announced in 2019, were completed last week.
MoneyGram’s Q2 Report Confirms Use of XRP to Facilitate Cross-Border Settlements
- MoneyGram posts a loss of US$ 27.2 mn for 2Q2019
- The company’s total 2Q2019 digital revenue represented 16% of money transfer revenue
- Ripple has invested US$30 mn in MoneGram, to invest US$20 mn more over next 2 years
MoneyGram, one of the world’s largest money transfer companies, put to rest the speculations about its partnership with Ripple in its Q2 report, saying “The commercial agreement allows MoneyGram to utilize xRapid blockchain product, as well as XRP cryptocurrency, to facilitate cross-border settlement.”
For 2Q2019, the company posted a net loss of US$27.2 mn on total revenue of US$323.8 mn, compared to a net income of US$2.3 mn on total revenue of US$374.6 mn for 2Q2018. The company’s 2Q2019 money transfer revenue stood at US$282.2 mn compared to US$329.7 mn during 2Q2018. The company’s total digital revenue represented 16% of money transfer revenue.
At the earnings call, MoneyGram stressed the financial aspects of the Ripple agreement, noting that Ripple paid $4.10 for MoneyGram shares, a significant premium to then price of $1.45. Apart from the US$30mn investment, Ripple has also agreed to invest up to an additional US$20 mn over the next two years at the same price of $4.10 per share.
In another update, MoneyGram is extending its partnership with EZ Money Express Sdn Bhd, its largest partner in Malaysia, to reach out to more customers in Malaysia.
Western Union Misses On Earnings, Announces 10% Staff Cut
- Western Union misses on its 2Q2019 earnings by a whisker
- Money Transfer giant to trim about 10% of its headcount as part of its cost-cutting program
- Enters into a partnership with Canada’s TD for cross-border money transfers
Another money transfer giant Western Union missed on earnings, with EPS coming in at $0.45 per share (compared to $0.46 in 2Q2018), missing analyst consensus estimates of $0.48 per share. Net income came in at US$614.8 mn in 2Q2019, compared with US$217.6 mn a year earlier. Revenue stood at US$1.34 bn in 2Q2019, down from US$1.41 bn reported in 2Q2018.
In another update, the company said it would trim about 10% of its headcount as part of a new cost-cutting program. The program is intended to trim $100 mn from its annual costs starting in 2021. The company had roughly 12,000 employees at the end of 2018.
Meanwhile, Western Union and one of Canada’s largest bank, TD, announced a convenient way for TD customers to send money internationally through Western Union. TD customers can send money cross-border from their personal TD dollar current, savings or line of credit accounts. At the other end, recipients can collect cash at Western Union locations in 200 countries and territories around the world. The service launched this month and is available online and via EasyWeb.
Revolut Launches Commission-Free Stock Trading Platform
- Revolut to launch its own Robinhood-type commission-free stock trading platform
- Customers can buy shares of 300 US-listed stocks on NASDAQ and NYSE from Revolut app
UK fintech firm Revolut is jumping into the online brokerage space with its own commission-free stock trading platform. The company launched the service — which lets users buy or sell popular US stocks at the tap of a button — looking to lure in millennials who normally shy away from investing.
After topping up the Revolut account, customers can buy and hold shares directly from the Revolut app. For now, the feature is limited to 300 US-listed stocks on NASDAQ and NYSE. The company says that it plans to expand to UK and European stocks as well as Exchange Traded Funds. Users of Revolut’s metal card will have up to 100 free trades a month, with the service schedule to come in the next few weeks.
With an easily accessible trading service, Revolut can differentiate from competitors and will likely see high demand from users. Until recently, investing in stocks has been relatively expensive and time-consuming, typically working with a broker like Hargreaves Lansdown and paying a hefty fee for each transaction. Revolut said that its customers will now be able to invest as little as $1.
Founded in 2015, the app-based bank now has 6 mn users, was last valued by investors at $1.7 bn.
SME Neobank Aspire Raises US$32.5 Mn in Series A Round
- SME-focused fintech bank Aspire raised US$32.5 mn in Series A round
- Investors include Mass Mutual Ventures, Arc Labd, Y Combinator, Hummingbird Ventures and Pincus Capital
- Aspire will use the capital to boost its financial product offering and strengthen local presence
Singapore-headquartered Aspire, who is on a mission to reinvent SME banking across Southeast Asia, announced a US$32.5 mn raise last week. The round was led by Singapore-based Mass-Mutual Ventures Southeast Asia, with participation from Silicon Valley’s Arc Labs and existing investors Y Combinator, Hummingbird Ventures, and Picus Capital. The fintech startup will use the capital to boost its financial product offering and strengthen local presence.
Aspire operates a neo-banking-like platform to help small and medium-sized enterprises quickly and easily secure working capital of up to about $70,000. AspireAccount, the startup’s flagship product, provides merchants and startups with instant credit limit for daily business expenses, as well as a business-to-business acceptance and other tools to help them manage their cash flow. The company plans to focus on SE Asia, where there are about 78 mn small businesses.
Founded in January 2018 by Andrea Baronchelli (former EVP and CMO at Lazada), Aspire aims to “reinvent SME banking in Southeast Asia”. The startup is serving a new generation of internet businesses with a mobile-first digital account across Thailand, Indonesia, Singapore and Vietnam.
Two of the Three Multibillion-Dollar Payment Mergers Announced in 2019 Closed
- Fiserve completes US$22 bn deal to buy first Data
- FIS completes US$ 43 bn purchase of WorldPay
- The US$21.5 bn TSYS/Global Payments deal, is also expected to close this year
Two of the three multibillion-dollar payment mergers announced in 2019 closed this week, and these global giants must now fend off the invigorated fintechs eager to nab unhappy merchant and bank clients. Fiserve’s US$22 bn deal to buy first Data and FISs US$43 bn deal to buy WorldPay closed last week.
FIS announced the closing of its acquisition of global payments leader Worldpay, creating a global leader in technology and solutions for merchants, banks and capital markets. The combined company will have over US$12 bn in pro forma revenue and more than 55,000 employees.
Fiserv also completed its acquisition of First Data Corporation last week. The companies said users would benefit from a “highly complementary combination” that offers a range of payments and financial services, spanning account processing and digital banking, integrated payments and the Clover POS system, among other products and services. With the transaction now complete, Fiserv is one of the world’s largest payments and financial technology providers.
Meanwhile, a third big merger, the US$21.5 bn TSYS/Global Payments deal, is also expected to close this year.
Listen in to our June 2019 Fintech Monthly Podcast here.
Weekly Round-up (22 July – 28 July 2019)
Action continued in the international payments and fintech space with crypto giant Ripple reporting to have sold US$251.51 million XRP in Q2 2019, Union Bank of the Philippines completing the cross-border blockchain remittance pilot, fintech Paysend closing £8.5 mn funding round, British challenger bank Revolut launching free accounts for freelancers and small business and US challenger bank MoneyLion raising US$100 mn in Series C funding. Also, there were reports of Facebook-owned messaging giant WhatsApp rolling out payments feature in India this year.
Ripple Publishes Q2 2019 XRP Markets Report
Ripple, a California-based blockchain startup focusing on the banking sector, published its latest quarterly XRP Markets Report last week that provides updates on the state of the market, including quarterly programmatic and institutional strategy and sales. In Q2, Ripple sold 900 mn XRP worth US$251 mn. The sale, at an average price of US$0.27 a coin, was 50% higher than it was last quarter. The majority of sales volumes came from the programmatic sales, rising by 34.5% to US$144.6 mn from US$107 mn in Q1. However, the direct institutional sales jumped 72.5% q-o-q to US$ 107.9 mn from US$61.9 mn. Since Q4 2016 to date, Ripple has cumulatively soldUS$1.14 bn of XRP. Some 36% of this was sold on exchanges, while the remaining 64% was sold to institutions. XRP’s global trading volumes dropped 27% from US$53.85 bn in the first to US$39 bn in the second quarter. Ripple currently has 20 customers using xRapid, who are transferring money between Mexico and the Philippines.
UnionBank of the Philippines Completes Cross-border Blockchain Remittance Pilot
Union Bank of the Philippines (UnionBank) became the first Philippine bank to successfully pilot blockchain-based remittance from Singapore to the Philippines. This was done in partnership with OCBC Bank, Singapore’s longest established bank, using the Adhara liquidity management & international payments platform and UnionBank-UBX’s i2i platform. A blockchain-based tokenized fiat was used to remit from OCBC Bank to an account holder at the rural Cantilan Bank in Surigao Del Sur. The i2i blockchain-based platform connects rural banks to each other and UnionBank, with the aim of promoting financial inclusion for millions of unbanked Filipinos, while combating the long payment delays and high fees currently endured in rural areas. With the successful pilot, the Bangko Sentral ng Pilipinas (BSP) anticipates greater adoption of blockchain and distributed ledger technologies. The blockchain system will be showcased at Singapore Fintech Festival this November.
Paysend Garners $10.6 Mn in Funding
Scottish fintech startup Paysend has closed a £8.5 mn Series B fundraise from GVA Capital, alongside 926 investors on crowdfunding platform Seedrs. GVA invested £3.95 mn into the international money transfer company, and Seedrs raised over £4.6mn. On Seedrs, the company had a pre-money valuation of £124.9 mn. £4.26 mn represents a 3.3% equity stake in the company. The Seedrs round was aided by leading investors Plug and Play and Digital Space Ventures, who have backed Fintechs like PayPal, Revolut, N26 and Tandem. During the campaign, Paysend also announced the launch of its global digital currency, Pays XDR, a digital currency 100% backed by a basket of five fiat currencies; USD, EUR, GBP, JPY, CNY. The fundraising proceeds are said to back the company’s international rollout. Paysend competes with the likes of Transferwise and CurrencyFair to help users request money from 50 countries and send money across 70 countries.
Revolut Launches Free Accounts for Freelancers and Small Businesses
Revolut for Business launched two business account plans with zero monthly subscription fees, designed to support a new generation of ambitious start-ups looking to start local and go global. The new plans, available to freelancers and corporates, reaffirm Revolut’s commitment to help businesses and to save entrepreneurs time and money. Revolut for Business, launched in 2017, now has more than 100,000 businesses as customers in Europe and the UK. Its new free account will offer free transfers to other Revolut users, but after a £5 limit will charge 20p per transfer, in a business model the company calls ‘pay-as-you-grow’. Although Revolut did not mention how many customers it expects to sign up by scrapping its £25 per month, product owner James Gibson said, “We got feedback from small businesses that £25 a month is too much for them.” And although there is no subscription fee, international transfers are charged 0.4pc above the interbank rate. Revolut for Business users will be able to tailor the features of their plan according to their business needs.
US Mobile Bank MoneyLion Raises US$100 mn at ‘Near-Unicorn’ Valuation
US app-based bank aggregation platform MoneyLion has completed a US$100 mn Series C funding round. The company, which claims 5mn members, enables users to view all their financial accounts from within a single app and receive advice on how better to manage their finances. This round was led by Edison Partners and Greenspring Associates. MoneyLion also raised US$60 mn in venture capital and debt in Q2 2018. Thus, it has raised more than US$200 mn to date, with its current round valuing the startup at nearly US$1 bn. MoneyLion will use the funding to accelerate its customer growth within the US and drive further adoption of its powerful bank membership, which includes fee-free checking, 55,000+ free ATMs and zero-fee managed investment accounts that offer diversified portfolios, low-cost ETFs and hassle-free contributions. MoneyLion differentiates itself from the growing pack of digital-only banks by charging customers membership fees so they can access a smorgasbord of financial services.
WhatsApp to Roll Out Payments Feature in India This Year
Facebook-owned messaging system WhatsApp is set to launch its local P2P payments system later this year, beginning in India, before rolling out to its 1.5 billion users globally. WhatsApp has been testing the system in India for the past year. The company is looking to make transferring money ‘as easy as sending a message on the platform.’ WhatsApp’s service would compete against the likes of Paytm, PhonePe and Google Pay. The company did not say whether the authorities have given final approval. The company believes such services were critical to accelerating financial inclusion in India and bringing millions more into the country’s fast-growing digital economy. The Facebook-owned firm has tested the service with about one million people over the past year. But a commercial launch has been on hold while it waits for approval from India’s banking regulator. WhatsApp is ubiquitous across India, but a full launch of its payments feature has been delayed. The firm has also been trying to comply with Indian regulations including data storage norms that require all payments-related data to be stored locally.
Listen in to our June 2019 Fintech Monthly Podcast here.
Weekly Round-up (15 July – 21 July 2019)
The international payments and fintech space witnessed continued action with money transfer giant MoneyGram partnering with Korean remittance startup, Sentbe, Western Union Partnering with South Korea’s KEB Hana Bank to enable global money transfers for the bank’s foreign national customers, PayPal expanding its international money transfer service Xoom to 32 markets across Europe, German neobank N26 raising an additional US$170 mn, Visa investing in Go-Jek to push digital payments in Southeast Asia and UK fintech Curve securing US$55 mn as part of a Series B funding round.
MoneyGram Partners with Korean Remittance Startup, Sentbe
International money transfer giant MoneyGram announced a partnership with Sentbe last week that makes the South Korean money transfer fintech the first MoneyGram virtual agent in South Korea. MoneyGram says the partnership aligns with its goal of giving customers a broad range of options for digital currency transfers. Sentbe, which is a regional operator of Samsung, wants to improve cross-border person-to-person money transfers by using new technology. Last month, MoneyGram entered into a strategic partnership with Ripple, a collaboration that enabled the latter to become MoneyGram’s key partner for cross-border payments and foreign exchange settlement using digital assets. This gave way to the speculations that MoneyGram might not be the only one extending relations with Sentbe, Ripple might be a part of the partnership. A recent update on its website, Sentbe said that it has partnered with “world-class fintech, Ripple”.
Western Union Global Payout Now Available via KEB Hana Bank’s Mobile App
In another development involving another global money transfer giant and a Korean firm last week, Western Union and KEB Hana Bank, a leading bank in Korea, have come together to enable global money transfers for the bank’s foreign national customers. Powered by Western Union, the app – Hana EZ – will be able to make fund transfers from their smartphones for cash payout in more than 200 countries. In essence, the service will be white-labelled: the forex aspect and the cash settlement will be done by Western Union, but the app and the branding will come from KEB Hana.
In another update, Western Union launched a collaborative service with Post Office Ltd, UK’s largest retail network, to offer UK consumers and businesses expanded digital international payment services. The Western Union cross-border money movement platform will power international money transfers and payments as an integrated service on the Post Office’s digital channel.
PayPal Expands Xoom Remittance Service in Europe
In a significant milestone, PayPal launched Xoom—its international money transfer service—in 32 markets across Europe last week. People in these markets can now use Xoom to send money, pay bills or top up phones internationally. The roll-out would help Paypal/Xoom grab market share in the US$ 689 bn (£550 bn) global remittances market, building on previous launches of the service in the US and Canada. Britons alone transfer over US$26 bn in remittances overseas annually, many sending money to help family members pay bills. This brings PayPal on par with other international money remittance services such as TransferWise, MoneyGram and InstaReM. It also sets Xoom against blockchain-based competitors like Ripple. Xoom allows customers to transfer money abroad to 130+ countries, including India, Pakistan, Nigeria, Kenya, and China. Prior to extending into Europe, Xoom lagged behind in originating markets. Western Union and MoneyGram both have 200 “send” markets. It also trailed digital firms like WorldRemit, TransferWise and InstareM which all have more send countries.
German Neobank N26 Raises Additional US$170 mn to Its Series D Funding Round
A few months after raising US$300 mn, German smartphone bank backed by billionaires Peter Thiel and Li Ka-shing has raised another US$ 170mn at a valuation of US$3.5 bn, making the company one of Europe’s highest valued non-listed fintech firms. While it’s technically structured as a new round, the company considers today’s new funding as an extension of the Series D round. Existing investors, including Peter Thiel’s Valar Ventures, Allianz X, Insight Venture Partners, Chinese tech giant Tencent and Singaporean sovereign wealth fund GIC, backed this latest round. N26 has now raised over US$ 670 mn and currently has 3.5 mn users. The fresh cash will help N26 ramp up hiring and fuel its global expansion strategy. Last week, the firm launched its mobile-banking app in the US, its first market outside Europe. It plans to start in Brazil in 2020 and aims to reach over 50 mn customers worldwide.
Visa Invests in Go-Jek to Push Digital Payments in Southeast Asia
Visa Inc. has become the latest investor in ride-hailing giant Go-Jek as the two companies push digital payments across Southeast Asia. The world’s biggest payments network has invested an undisclosed amount in Go-Jek as part of the Indonesian company’s ongoing F Series fundraising round. The two companies will work together to provide greater options for cashless payments and more seamless experiences for consumers across Indonesia and Southeast Asia. With GO-PAY’s position as Indonesia’s market leader in digital payments and financial inclusion, this round of funding will support the acceleration of GOJEK’s payment services across Southeast Asia. Go-Jek’s Go-Pay is Indonesia’s market leader in mobile on-demand services and payments platform. Launched in 2011, Go-Jek has evolved from ride-sharing to allowing its customers to make online payments and order everything from food to groceries and massage services. The Indonesian company raised about US$1 bn earlier this year and is valued at up to US$10 bn.
Fintech Company Curve Raises US$55 Mn at US$250 Mn Valuation
Curve, the Over-The-Top banking platform that consolidates multiple cards and accounts into one smart card and an even smarter app, has secured US$55 mn from a group of investors as part of the Series B funding round. The investment places Curve in the top five UK consumer fintechs next to Transferwise, Monzo, Revolut and Starling. In its Series B round, it secured investment from Gauss Ventures, Creditease, IDC Ventures and existing backers Outward VC, Santander InnoVentures, Breega, Seedcamp and Speedinvest. The banking platform is now valued at US$250 mn following this round of funding, and it will invest this money into adding more features to the platform and further expanding operations in Europe. Curve came out of beta in February 2018 and is already available in 31 European countries and plans to use the fresh funding to expand its product offering in the UK, Europe and overseas. The startup said it will officially launch into six European markets later this year – France, Germany, Italy, Poland, Portugal and Spain – and aims to launch its operations in the US by mid-2020.
Weekly Round-up (8 July – 14 July 2019)
Action continued in the international payments and fintech universe with Facebook’s Libra cryptocurrency continuing to attract concerns from global policymakers, German neobank N26 announcing to make its US debut, Remitly raising US$ 135 mn with a US$85 mn credit line, Mastercard announcing completion of Transfast acquisition, P2P currency exchange app WeSwap bidding for £2.3 mn crowdfund raise and the UK fintech neobank Revolut announcing to open tech centre in Berlin.
Facebook’s Libra Cryptocurrency Continues Under Fire from Global Policymakers
Since about a month of its announcement, Facebook’s planned cryptocurrency Libra continues to remain the talk of the town for politicians and central bankers worldwide. The social network’s digital token, continues to be faced with warnings from the international community, amid ongoing worries about its regulatory implications. Libra will function as a stable alternative currency tied to major government currencies. Policy makers from France to Australia have expressed disdain and criticism on the social-media giant’s intentions, questioning how it will affect everything from data privacy to financial stability. French Finance Minister Bruno Le Maire said he was against the idea of Libra becoming a “sovereign currency” that gives it the chance to compete with government-backed currencies like the euro. Mark Carney, the governor of the Bank of England, has expected high standards for Facebook’s Libra, saying the coin will need to be “rock solid” in order to get off the ground. The BOE governor said he is approaching Libra with an open mind, but it will be subject to a careful eye. Earlier, Federal Reserve Chairman Jerome Powell told lawmakers in Washington that Libra raises “many serious concerns regarding privacy, money laundering, consumer protection and financial stability.” Meanwhile, Japan has become the latest country who has begun to investigate the ramifications of Facebook’s upcoming Libra cryptocurrency.
German Neobank N26 Set to Make its US Debut
While Deutsche Bank, Germany’s biggest bank, announced a major retreat from the US last week, the Berlin-based digital financial startup N26 is launched there last week, aiming to go head-to-head with America’s banking titans. N26, which runs a consumer banking app and payment card, says it has 3.5 mn customers spread across Europe, from France and Germany to the UK. It has partnered with San Diego-based Axos Bank. N26 received a banking license in Europe in 2016, and it will operate in the US through a New York subsidiary. N26 is launching checking account and debit card in the US, allowing the 100,000 people on its waitlist to sign up and access its beta product, which it plans to roll out in full later this summer. N26 already has a strong presence in the market, where it operates via its wholly-owned subsidiary, based in New York. N26 first revealed plans to expand to the US back in 2017, a rollout that was initially mooted for 2018 before being pushed back to 2019.
Remitly Raises US$135 mn and inks US$ 85mn Credit Line to Grow Remittance Service
Seattle-based Remitly announced a US $220 mn cash infusion last week, becoming third digital remittance company – after TransferWise and WorldRemit – in the past two months to raise US$100+ mn. It secured US$ 135 mn in equity financing and US$ 85 mn in debt at a valuation just shy of US$1 bn. Generation Investment Management led the Series E equity round. Owl Rock Capital, Princeville Global, Prudential Financial, Schroder & Co Bank AG and Top Tier Capital Partners; and previous investors DN Capital, Naspers’ PayU and Stripes Group all also participated in the equity round. The US$ 85 mn debt comes from Barclays, Bridge Bank, Goldman Sachs and Silicon Valley ank. Remitly has raised US$ 311 mn+ in equity to date and is now valued at just under US$ 1 bn. The company has no plans to put itself up for sale or have an initial public offering. The startup will use the money both to help it continue to keep growing that money transfer business and to catch new opportunities in the form of new financial services for immigrants and migrants. Set up in 2011, Remitly lets consumers send cash from 16 nations like the US, the UK and Australia to 44 countries including Mexico, El Salvador and Rwanda.
Mastercard Further Extends Payment Network with Acquisition of Transfast
Mastercard announced last week the completion of the acquisition of Transfast, a global payments company with significant cross-border network reach. The acquisition builds on Mastercard’s strength in payments and drives improved transparency and certainty in cross-border transactions, enabling people and businesses to send and receive money beyond borders with greater speed and ease. Transfast reaches 90% of the world’s population and more than 90% of the world’s bank accounts, with reach across 100+ countries. The deal will expand Mastercard’s global network and help facilitate person to person and B2B transactions, among other payment flows. The combination will particularly benefit businesses which make cross-border payments to its vendors and partners. The buyout is also in line with the company’s focus on growing its presence in the B2B space.
WeSwap Returns to Seedrs; Seeking £2.3 mn in Funding
Currency exchange app WeSwap has launched a £2.3 mn crowdfunding round on Seedrs after hitting the 500,000 user landmark. The raise will support a Series B investment round led by IW Capital, WeSwap’s lead investor, which has invested an additional £3.7 mn in the travel money start-up, including £1.7 mn of equity in this round. The London-based business will use the cash to “launch in a brand new country before the end of the year”, it said in its Seedrs pitch to investors. It added that it was working on a range of products such as travel insurance, and fair lending for holidays. These products “have been successfully beta-tested and we plan on launching these fully late 2019/early 2020”. However, the start up added that the largest portion of the cash raised, 41%, will be spent on marketing. This latest round will allow them to launch a range of new WeSwap product innovations and expand into Asia. This is WeSwap’s third raise on Seedrs, having previously attracted over £3.5m from 3,868 investors.
Revolut to Open Tech Centre in Berlin
Fintech startup Revolut is opening a small tech hub in Berlin, tapping the fintech talent in the city. The company plans to hire 80 people at first for many different tech jobs, from software engineering to data science, product and growth. Set to open in October this year, the new hub will provide Revolut with a direct presence on the turf of local rival N26. The company claims to have 15,000 customers in Germany. Revolut’s new hub will be located in Friedrichstraße, which is an existing fintech ecosystem in Berlin, and one of the largest in Europe. The new teams will be focused on localizing Revolut’s product and services for the German and European market, while also supporting the wider business on new projects, such as international expansion, commission-free stock trading and a new app for children. Set up in 2015, the pre-paid debit card, peer-to-peer payments, remittance, and currency and cryptocurrency exchange company was founded by Nikolay Storonsky and Vlad Yatsenko in London.
Weekly Round-up (1 July – 7 July 2019)
The international payments and fintech space witnessed continued action with several companies expressing interest in digital banking license in Singapore, Currencycloud reportedly raising £32 mn in Series E round of funding, PayU expanding its operations to Southeast Asia with acquisition of a Singapore e-payments firm, InstaReM launching card-issuance platform for fintechs, and remittances to Bangladesh hit a record high in FY2019.
Singapore to Allow Digital Banks; MAS Issuing up to 5 New Licenses
Up to five new digital bank licences will be issued in Singapore, paving the way for non-bank players to break into a local financial services scene dominated by a handful of traditional providers. Singapores’ Senior Minister (also the chairman of the Monetary Authority of Singapore, Tharman Shanmugaratnam announced the move previous week. The five new digital licenses will comprise of two digital full bank licenses that will allow licensees to provide a wide range of financial services and take deposits from retail customers. Up to three licenses will be digital wholesale bank licenses that will allow holders to serve SMEs and other non-retail segments. Digital full-bank licenses are open for application by companies headquartered and controlled by Singaporeans, as well as foreign companies, but only if they form a joint vnture with a Singapore company. The applicants must have a track record in operating an existing business, or in technology or e-commerce fields. Digital-only banks are defined as institutions that provide all of its banking facilities online, eliminating the need for a physical branch. Several tech companies have reportedly expressed their interest in applying for the digital banking license, with some companies openly announcing their application.
InstaReM Seeks Banking Licence in Singapore
Singapore-headquartered cross-border payments startup InstaReM is seeking partners in the lending business as it prepares to apply for a digital banking license in the city state. The Monetary Authority of Singapore will grant as many as two digital full-bank licenses and up to three digital wholesale bank licenses. Singapore Telecom, Grab and Razer have expressed an interest, but InstaReM is the first company to say it will apply for a license. “InstaReM already provides services similar to transaction banking in a bank so this would be a natural extension for us,” said InstaReM CEO Prajit Nanu. “One key aspect where we have limited ability is lending and we will be looking to partner to create the lending experience in the same technology stack.” Founded in 2014, InstaReM is regulated in the US, the EU, Singapore, Canada, Hong Kong, India, Australia and Malaysia, and processes billions of dollars a year for banks, payments institutions and retail users across the world. The startup is backed by investors including Vertex Ventures, Fullerton Financial Holdings, Rocket Internet and MDI Ventures.
Currencycloud Raises Around £32mn in Series E: Report
Currencycloud, the provider of an API and service for cross-border payments, has closed the first part in a round of Series E funding. According to TechCrunch, the London-headquartered company announced internally that it was closing in on new funding a few weeks ago, while a recent regulatory filing reveals that the Series E totals just shy of £32 mn in new shares issued so far. However, it is believed that this is just tranche one, and that additional Series E funding will follow within the next 2-3 months when the round will be officially announced. Goldman Sachs is rumoured to be investing, along with other possible investors GV and Santander. Currencycloud operates across Europe, the US and Canada, with clients including Visa, Starling Bank, Standard Bank South Africa, Travelex and Klarna. It has processed over US$50 bn in transfers and sent funds to more than 180 countries. Currencycloud’s suite of APIs is used by a host of big names – including Visa, Klarna, Standard Bank and Revolut – to enable international money transfers.
PayU Expands into Southeast Asia; Takes Majority Stake in SG e-payment Firm
Naspers-owned Fintech and e-payment business PayU has taken a majority stake in Singapore online payment company Red Dot Payment, PayU said in a statement last week. The deal values Red Dot at US$65 mn. This allows PayU to plant its flag in South-east Asia. PayU plans to tap that potential through Red Dot, an eight-year-old startup founded by finance veterans that offers services that include a payment gateway, e-commerce storefronts and online invoicing across Southeast Asia. The move demonstrates PayU’s commitment to becoming the leading payments solution provider in high-growth markets. With this deal, PayU successfully creates a winning proposition for global merchants by integrating RDP platforms into the PayU Hub.
InstaReM Launches Card-Issuing Platform For Fintechs
InstaReM, which specializes in digital cross-border money transfers and payments, has announced a new API-based digital platform that will enable startups, FinTech companies and enterprises to launch their own branded cards. Using the global digital ecosystem for payments and remittance that InstaReM has already constructed, the new platform is designed to make it easy to issue branded cards without needing to obtain multiple local licenses. Designed to operate alongside the successful Visa Fintech Fast-Track Program, InstaReM’s card-issuing platform will offer next-generation digital payments and cards as a B2B solution. InstaReM’s customers may now leverage the company’s global digital ecosystem for payments and remittance, without needing to obtain multiple local licenses to be able to issue payment cards to their employees and vendors. The cards will be available in virtual and physical (plastic) form. Individual consumers can use the cards as a multi-currency travel card and collect and redeem loyalty points. Business users can use cards for business-related expenses as well as for payouts to their employees and vendors among others.
Bangladesh Remittances Hit Record US$16.4 bn in FY19
Remittance inflows into Bangladesh hit record US$16.4 bn in the just-concluded fiscal year 2018-19, thanks to the continuous depreciation of taka against the US dollar, encouraging more expatriate Bangladeshis to opt for sending money through legal channels. The inflow was 9.47% higher compared to US$ 14.98 bn received on remittances last fiscal year, according to data of Bangladesh Bank. The country received US$12.76 bn remittance in FY17 and US$14.93 bn in FY16. Bangladesh banks officials said that the record US$1.75 bn remittance by the expatriates in May, the immediate preceding month of Eid-ul-Fitr, one of the biggest religious festivals of the Muslims, also helped attaining the record volume of remittance in FY19. Besides the Eid-factor, appreciation of the dollar in the country’s local market against the taka was a major stimulus to sending more remittance through legal channels. The exchange rate was around Tk 84.50 for a dollar, last week up nearly 1% from a year earlier. Strengthening the central bank’s monitoring on the foreign exchange market to tackle ‘hundi’, an illegal way to transfer money between nations, also helped.
Weekly Round-up (24 June – 30 June 2019)
Action continued in the international payments and fintech space with growing regulatory concerns about Facebook’s cryptocurrency Libra coin, InstaReM announcing plans to apply for the digital banking license in Singapore, reports of seven more banks joining Ripple’s MoneyTap payment platform, TransferWise launching in the US, UK neobank Monzo doubling its valuation to £2 bn with its fresh £113 mn funding and banking giant JP Morgan launching E-Customs Payment solution to digitize cross-border payments in China.
Facebook’s Libra Coin Continues to Face Massive Regulatory Scrutiny
Facebook is likely to face unprecedented regulatory scrutiny over a new digital currency that the social media company hopes will become globally recognized legal tender within a year. The regulators and finance watchdogs all over the world are strongly refuting the project at the moment, leading with the US Government’s hearing on 17th July 2019 and G7 Financial Task Force review. China and other international organizations also raising apprehensions on it. Facebook’s announcement has met with immediate backlash from US lawmakers and regulators across the globe, who are concerned that Facebook is careless with users’ privacy. The plan for Libra involves taking customer deposits, investing them in government bonds, holding traditional currencies in reserves and offering cross-border services and transacting in the new coin will require engagement with central banks, financial regulators and enforcement authorities around the globe. According to China’s Peoples’ Daily, Libra poses significant threats to global financial stability and privacy laws. Facebook is banned in China. Some countries, such as Pakistan, Indonesia, and Bangladesh have temporarily banned Facebook, possibly limiting the effectiveness of any money tied to the app. Many of these countries have laws around cryptocurrency. India’s current regulations mean Libra can’t operate there.
InstaReM to Apply for Digital Banking License in Singapore
Remittance fintech startup InstaReM announced last week that it plans to apply for the digital banking licence in Singapore when applications open in August. Speaking to BT minutes after the announcement came out, InstaReM CEO and founder Prajit Nanu said InstaReM will surely be applying for a licence. InstaReM is likely the first to publicly register its interest in holding a digital banking licence, with the startup currently powering payments for three of the top 10 South-east Asian banks. “With our global infrastructure and technology, InstaReM is ready to take full advantage of this opportunity and contribute to the market with an enhanced set of offerings,” Prajit said. The Monetary Authority of Singapore (MAS) has decided to issue up to a maximum of five digital banking licenses, comprising up to two full-bank licenses and three digital wholesale bank licenses. Three other firms (SingTel, Grab and Razer Inc) have also expressed interest in applying for the digital banking license.
Seven Banks Join SBI Ripple Asia’s Money Tap Transfer Platform
Ripple’s Southeast Asian payment platform MoneyTap, developed with Japanese partner SBI Group, has added another 7 new banks as participants. These include Chikubo, Ashiga, Towa, Shimane, Toho and Fukushima Banks. This comes just a month after 13 other Japanese banks joined MoneyTap and its application, which uses Ripple’s services and it is a very important part of Ripple’s expansion in Asia and in the country. Ripple is currently focused on expanding its services in Asia and improving the cashless payments sector. In partnership with Ripple’s xCurrent, the app is an instant localized bank-to-bank transfer channel, which was designed to serve Japan’s bank customers looking for a 24×7 transactions option. The MoneyTap app was launched in October 2018, and has been a milestone for Ripple. The smartphone app powered by Ripple’s hyper ledger blockchain technology was the first of its kind developed for use by different Japanese Banks.
TransferWise to Offer Borderless Account in US
TransferWise is the latest fintech unicorn to try its hand at breaking the US, taking its borderless bank account and debit card across the pond one year on from its launch in Europe. TransferWise’s US launch comes just weeks after fellow UK challenger Monzo announced it would open up shop later this year and Germany’s N26 promised to make a splash in just a matter of weeks. At present, the card is only available for personal account customers. It has been launched this week. Business account customers, however, will have to wait a bit longer for their equivalent to be launched. TransferWise introduced its borderless accounts to US customers in August 2018, but without a debit card. The TransferWise debit Mastercard was launched in the UK and EU in 2018. Since then, customers have deposited over £2 bn in their accounts. There have been 15 mn transactions on UK and EU TransferWise cards to date. Customers in the UK, US, Europe, Australia, and New Zealand who sign up for TransferWise’s debit card get international bank details, including account and routing numbers unique to them. The card syncs with digital wallets such as Google Pay, Apple Pay and Samsung Pay. The card will work in over 40 currencies without balance limits, and conversion fees will be competitive with current exchange rates. A similar card aimed at businesses will follow the consumer launch. The debit card is geared toward consumers who travel, shop or send money internationally, freelancers working for overseas companies and small business owners who pay international suppliers.
British Online Bank Monzo Doubles Valuation to US$2.6 Bn
British Digital bank Monzo has achieved a valuation of £2 bn following its latest funding round, which raised £113 mn. US investors Y Combinator Continuity led the round, along with Latitude and existing investors. A number of other new and existing investors Latitude, General Catalyst, Stripe, Passion Capital, Thrive, Goodwater, Accel, and Orange Digital Ventures have also participated in the Series F. The fresh funding doubles its valuation from where it stood following its last raise in 2018, when it secured £20 mn (US$25.5 mn) in crowdfunding. The price reinforces the fast-growing digital bank’s position as one of the most highly rated financial technology companies in Britain, alongside the likes of Oaknorth, Revolut and Transferwise. Monzo said it will use the extra capital to underpin its growth strategy as well as gain a foothold in the US. The start-up announced plans to expand to Los Angeles and other major US cities last week. The U.S. launch is being done in partnership with a local bank, but in the longer term Monzo plans to apply for its own U.S. bank license, similar to the strategy it employed in the U.K. so as to own and operate as much of its technical, product and regulatory infrastructure as possible. Monzo has over 2 mn users in the UK. It’s part of the growing universe of the “challenger banks,” a group that also includes Starling Bank and Revolut in Europe and Chime in the US.
JP Morgan Launches E-Customs Payment Solution to Digitize Cross-Border Payments in China
Top global financial institution JP Morgan announced the launch of E-Customs Payment Solution last week, making it the first foreign bank in China to offer a solution that fully digitizes and automates cross-border payments of goods. The solution solves common pain points associated with the manual nature of such transactions. The banking giant said that, in general, import activity mandates that firms based in China must offer supporting documentation to banks ahead of making payments to their overseas suppliers. Yet, through this new solution, the bank said its clients in China need to send payment instructions with what it termed a “linked” customs declaration number. That activity through the payment offering is tied to application program interfaces (APIs). An API works to retrieve customs declaration status in real time through the Shanghai International Trade Single Window.
Listen in to our May 2019 Fintech Monthly Podcast here.
Weekly Round-up (17 June – 23 June 2019)
The week of 17-23 June 2019 saw continued action in the international payments and fintech space with cryptocurrency giant Ripple announcing strategic partnership with money transfer giant MoneyGram, Social Media giant Facebook revealing its digital currency for online financial transactions, TransferWise getting Malaysian remittance license and US banking giant JPMorgan reportedly planning a digital bank in the UK. Meanwhile, the global money-laundering watchdog FATF has initiated a clampdown on cryptocurrencies.
Ripple Announces Strategic Partnership with MoneyGram
Cryptocurrency giant Ripple has agreed to enter into a strategic partnership with MoneyGram, one of the world’s largest money transfer companies. Through this partnership, Ripple would become MoneyGram’s key partner for cross-border payment and forex settlement using digital assets. Ripple has also agreed to provide a capital commitment to MoneyGram, to draw up to US$50 mn in exchange for equity over a two-year period. Under the terms of the deal, Ripple will acquire an 8% to 10% stake in MoneyGram. This translates into a $30 mn investment, and also gives MoneyGram the option for another US$20 mn cash infusion in the next two years. The deal provides a great opportunity to make the case that X-Rapid, which allows for the transfer of XRP, is superior for moving money across borders. Ripple claims that XRP is the most efficient digital asset for payments with transaction fees at just fractions of a penny, compared to Bitcoin fees of about $30 per transaction.
Facebook Unveils Worldwide Digital Currency, Wallet Plan
Social media giant Facebook has unveiled details of its much-anticipated digital currency offering, which it hopes will transform financial services. Named Libra, the cryptocurrency will enable Facebook’s 2.4 bn users to make international transactions and is expected to go live in early 2020. A new cryptocurrency that aims to provide fast, cheap, and secure online payments via smartphones across the globe. The newly created digital currency will function as a stablecoin, in the aim of making it less subject to volatility. The Libra currency will not be run by Facebook, but Facebook does have a plan to profit from it with a new subsidiary, Calibra, which is building a digital wallet of the same name for storing and exchanging the currency. The currency will be serviced by a group of companies called the “Libra Association”, an independent, not-for-profit org based in Switzerland. What is not clear is how exactly Libra will go through the complex business of verifying the identity of these people to comply with AML regulations. Meanwhile, regulators and other crypto players have all responded to the unveiling of Libra project and suggested that the digital currency plans may face several challenges. According to TechCrunch, India, Facebook’s biggest market, is among the list of countries where Calibra does not intend to launch as Indian central bank Reserve Bank of India does not want cryptocurrency to spread like a contagion, citing potential harms. Calibra will also not be available in China, North Korea and Iran.
TransferWise Gets Malaysian Remittance Licence
London-based fintech company TransferWise has secured a remittance license from Bank Negara Malaysia, which will make Malaysia the fourth in Asia – after Singapore, Japan and Hong Kong – to have the service. With this, TransferWise customers will be able to send money to 71 countries. Apart from the regular money transfer services, Transferwise is also expected to launch additional services, including its multi-currency Borderless Account, once authorization from BNM has been secured. Malaysia’s Communications and Multimedia Minister Gobind Singh Deo said the entry of TransferWise into Malaysian market will help improve financial inclusion and support.
JP Morgan Working on a Secretive Digital Banking Project in London: Reports
A number of incumbent banks in the UK are known to be developing new digital-first products in a bid to keep the new wave of challenger banks at bay and now it appears that the latest to make that move is JP Morgan, who is reportedly in the initial stages of building out a new online banking project from London which could potentially run independently within the bank. According to TechCrunch, it comes just weeks after the bank shelved its millennial banking product in the US, Finn. According to the TechCrunch report, the investment bank has begun recruiting for a secretive project within London’s booming fintech industry. The US bank has been reaching out to developers to build a product which could challenge Goldman Sachs’ Marcus and the UK challenger banks like Monzo. According to sources, the investment bank has begun recruiting for a secretive skunkworks project within London’s booming fintech industry.
Global Money-Laundering Watchdog Launches Crackdown on Cryptocurrencies
Cryptocurrency firms will be subjected to rules to prevent the abuse of digital coins such as bitcoin for money laundering, Financial Action Task Force (FATF), a global watchdog said last week, the first worldwide regulatory attempt to constrain the rapidly growing sector. FATF, set up to tackle money laundering, has told countries to tighten oversight of cryptocurrency exchanges to stop digital coins being used to launder cash. The move by FATF reflects growing concern among international law enforcement agencies that cryptocurrencies are being used to launder the proceeds of crime. Countries will be compelled to register and supervise cryptocurrency-related firms such as exchanges and custodians, which will have to carry out detailed checks on customers and report suspicious transactions. Calling the “threat of criminal and terrorist misuse of virtual assets” a “serious and urgent” issue, FATF said that it will give countries 12 months to adopt the guidelines, with a review set for June 2020. The latest crackdown on cryptos comes just a few days after the social networking giant Facebook unveiling its plan of launching a new cryptocurrency, which has potentiality to deliver services and receive payments without any financial surveillance, given the extent of its havoc-scale user-base.
Listen in to our May 2019 Fintech Monthly Podcast here.
Weekly Round-up (10 June – 16 June 2019)
Action continued action in international payments and fintech universe in the week of 10-16 June with UK e-Payment specialist PPRO acquiring the Latin American paytech firm Allpago, remittance provider WorldRemit launching a cross-border B2B solution for SMBs, reports of Facebook’s proposed cryptocurrency finding backing from big names in global payments space, UK challenger banks Revolut and Monzo launching in Australia and the U.S., respectively, and crypto giant Ripple expanding into the south American market with a launch in Brazil.
PPRO Acquires LatAm Paytech Firm Allpago
The UK cross-border e-payments specialist PPRO announced the acquisition of Latin American payments provider Allpago to create the world’s leading platform for local payments. Allpago is the preeminent provider of payment and gateway services in Latin America covering 90% of the market. The acquisition follows PPRO’s recent expansion into Asia-Pacific and North America. It is part of PPRO’s strategy to become a global platform with direct integrations into all major local payment methods worldwide. The deal will see PPRO become a major influence in all markets globally and is adding a wealth of additional local payment methods (LPMs) to their payments offerings. By utilizing allpago’s knowledge and technical integrations into LPMs, PPRO can add even more value to their customers: payment service providers and their merchants.
WorldRemit for Business Launched for SMEs
WorldRemit is launching WorldRemit for Business, which will enable UK-based Small- and Medium-sized Businesses (SMBs) to pay employees and contractors in 140 countries. By extending its money transfer service to SMEs, WorldRemit claims to save businesses time and money when they make international payments. Customers sending funds abroad can easily track their transfers in real-time on WorldRemit app and opt-in to receive daily exchange notifications to send money abroad at the optimal time. The new service will make it easier for local enterprises to receive payment by UK-based partners via their bank account or cash pick-up. While some banks can take up to one week to process payments, WorldRemit says its transfers to SA are processed within 24 hours or less. WorldRemit for Business enters a competitive market, taking on global transfer business giants including Western Union, TransferWise, Venstar Exchange, XE Money Transfer and Mastercard Send.
Facebook’s New Cryptocurrency, Libra, Gets Big Backers
Facebook is reportedly gearing up to announce its own brand of cryptocurrency next week with the backing of over a dozen major financial organizations. According to the Wall Street Journal, Facebook’s venture into the cryptocurrency space has been strengthened with the support of companies including Visa, Mastercard, PayPal, and Uber. The fintech company Stripe, the travel booking platform Booking.com and the Argentinan e-commerce site MercadoLibre are also involved in the initiative, according to the report, suggesting the project will operate at the international level. Each company will be investing $10 million into the project. Libra, which has been in the works for about a year, will not be directly controlled by Facebook nor members of the consortium. Instead, some member companies will act as so-called “nodes” in the larger network, helping to verify and keep records of transactions. According to Bloomberg, European financial technology firms, including TransferWise and German banking startup N26 Bank GmbH, are embracing plans by Facebook to push into digital currencies and payments, brushing off potential rivalries.
UK Fintech Revolut Launches in Australia
United Kingdom fintech start-up Revolut launched its app in Australia last week, marking its first expansion outside of Europe. The online banking platform said it would gradually sign up 20,000 Australians already on a waiting list, while new customers will have to wait a little longer. Revolut, which has more than 5 mn customers in various European countries, aims to help Australians gain greater control over their spending, as well as a lower-cost way to transfer money overseas. Australian consumers will be able to hold and exchange 15 currencies directly in the app, including Australian, New Zealand and US dollars, British pounds and Euros. Revolut has chosen Melbourne as the location for its Australian headquarters. It plans to hire 30 staff for a gradual roll out of its money transfer app. London-based Revolut is a digital bank which provides users with instant payment notifications, free international money transfers and global fee-free spending. After launching in 2016 and having conducted 12 rounds of funding since, Revolut has raised $336m.
Fintech Unicorn Monzo Is Expanding Into the U.S.
With over 1.9 mn customers in the UK, last week, the rapidly growing banking unicorn Monzo announced plans to launch in the U.S. The UK firm has lured customers away from traditional banks in the country by promising a better customer experience. The company would initially offer a “few thousand cards” to American customers at launch events in Los Angeles, California. Monzo is partnering with Ohio-based Sutton Bank at first, but intends to apply for a US bank charter this year. If successful, it would be among the few banks chartered in the US since the 2008 financial crisis. The challenger bank is reportedly close to clinching £100m from a new but unnamed American investor just months after raising £20m in a crowdfunding campaign that involved many of its customers. It has raised £85m in its most recent round of funding. That puts its valuation north of 1 billion pounds, with investors including Accel, Thrive Capital, and General Catalyst. If the new investment goes ahead, Monzo will leapfrog rival Revolut as the UK’s second most valuable fintech startup, behind small business lender OakNorth.
Ripple Expands into the South American Market, Launching in Brazil
Ripple is looking to expand its footprint in Latin America, launching operations in Brazil. The enterprise blockchain solutions firm indicated that it made the decision in ‘response to high customer demand in South America’. Ripple’s South American operations will be led by Luiz Antonio Sacco, a veteran in the financial technology space. Among the problems that Ripple has set out to address include the fragmentation and unreliability of the current payment structure. According to Ripple, this has made cross-border payments ‘slow, inefficient and costly for banks and businesses’. The company made the announcement during the International Congress & Exhibition of Information Technology for Financial Institutions in Sao Paulo, Brazil.
Listen in to our May 2019 Fintech Monthly Podcast here.
Weekly Round-up (03 June – 09 June 2019)
The week of 3-9 June 2019 witnessed continued action in international payments and fintech space with the payments giant PayPal announcing to invest US$11 million in Swedish fintech start-up Tink, MoneyGram and Canada Post introducing a new digital money transfer service, WorldRemit raising US $175 mn in Series D funding, payments giant Visa teaming with Western Union to speed up global payments and the B2B payments platform TransferMate unveiling an API enabling businesses to directly integrate payment technology into their existing systems. Meanwhile, there were rumours of crypto giant acquiring MoneyGram during the last week.
PayPal to Invest US$ 11mn in Swedish Fintech Start-up Tink
The San Jose, California-based payments giant, PayPal has invested €10 mn (US$11.2 mn) in Tink, a Swedish company that enables banks and financial technology startups to access financial data more easily, the companies said last week. PayPal would utilize Tink’s technology to let customers link their bank accounts with their PayPal accounts. Tink will use the funding to expand its team, develop new products and link to more banks, it stated. In February, the company had raised US$62.7 mn (€56 mn) from financiers counting Insight Venture Partners and the venture capital subdivisions of banks ABN Amro Group NV and Nordea. Tink is already active in nine European countries and is looking to expand into neighbouring markets. The company is also planning to increase its staff force and open another three Europe-based offices. The partnership with PayPal will see the payments giant gain access to Tink’s account-aggregation tech to “improve the produce experiences” for its European customers.
MoneyGram Partners with Canada Post for Digital Money Transfers
Global money transfer service provider MoneyGram announced last week a new digital money transfer service with Canada Post, enabling money transfer consumers to start a transaction online and conveniently complete it at select Canada Post locations. To initiate a transaction, consumers simply visit moneygram.ca, create a profile, start a transaction and choose the ‘Cash at a Location’ option. From there, users visit one of Canada Post’s more than 5,200 locations that offer MoneyGram services to complete their transaction. Canada Post is the No. 1 parcel company in Canada, delivering nearly two out of every three boxes that are ordered online in the country. Canada Post reaches 16.2 mn locations. MoneyGram is available for money transfers in more than 200 countries and territories around the world, and is an industry leader in the protection of customers.
WorldRemit secures US $175 mn in Series D funding round
WorldRemit, the London-based startup that focuses on enabling quick money transfers from migrant workers and immigrants has raised US$175 mn in a Series D round of funding from TCV, Accel and Leapfrog. WorldRemit plans to use funds to propel its international growth and to diversify the products it offers its customers who send and receive money transfers. It is planning to start a new service for small and medium-sized businesses that require money transfer services for their international operations, especially in emerging markets. According to Crunchbase data, the company has raised US$407.7 mn to date. Its last US$ 40 mn Series C round of funding valued the company at US$668 mn in December 2017. WorldRemit serves almost 4 mn customers transferring money from 50 “send” countries to 150 “receive” countries. Having already become one of the first UK financial service firms to secure licences in all 50 US states, WorldRemit is aiming for further global growth. The company went through a leadership shakeup last year when co-founder Ishamael Ahmed stepped down as CEO, replaced by Breon Corcoran, who previously headed up online betting company Paddy Power Betfair.
Visa, Western Union Team to Speed Global Payments
Last week, Visa announced a new strategic agreement with Western Union, a global leader in cross-border money movement. Western Union will implement Visa Direct, Visa’s real-time push payments platform to bring speed and transparency to the process of sending money around the world. Once Western Union’s implementation of Visa Direct is live, Western Union will be able to offer customers an expedited remittance service onto cards with more transparency and an enhanced user experience for both senders and receivers. Western Union will leverage Visa Direct to offer consumers and businesses expedited global, push-to-card transfers. The partnership helps the companies scale real-time, cross-border payments across more than 200 countries and territories, and 130 currencies. Visa Direct could be used for a wide variety of transfers, ranging from employers paying an employee located in a different market to migrants sending money home, as Visa Direct supports transfers up to $100,000. Recently, Visa announced the acquisition of cross border payments company, Earthport which counts as an extension of Visa’s strategy to transform cross border payments.
TransferMate Launches B2B Cross-Border Payments Tool
TransferMate, a leading cross-border B2B payments providers, at Money2020 Europe in Amsterdam last week, launched the TransferMate API, allowing software partners and business customers access to its globally regulated payments technology through direct integration. TransferMate API is capable of securely embedding same-day, cross-border payments, handling multiple payments at once and thus ultimately assisting in reducing the manual workload. The TransferMate API offers a full suite of secure developer tools and webhook functionality, all fully documented on its developer portal. Key API calls include: token-based authentication requests, setting up bank accounts, adding beneficiaries, getting an exchange rate, booking a payment and getting status updates on payment progress. TransferMate says it enables same-day payments across 162 countries and 134 currencies.
Rumours of Ripple Acquiring MoneyGram
After a rumor broke out last week that the crypto start-up Ripple has acquired the US-based money transfer company MoneyGram. The rumor started with a post on Twitter by a trader called CryptHawk, who claims that Ripple has indeed acquired MoneyGram, referring to a “trusted source”. However, this remained just a rumor as neither Ripple nor MoneyGram confirmed or denied. Both have stated that they do not comment on speculations. Both companies have been in collaboration since 2018. In January 2018, the two firms entered into a partnership, according to which MoneyGram would pilot XRP in their payment flows. Additionally, MoneyGram would be integrated into one of Ripple’s products; xVia. In January, Reuters reported that MoneyGram was exploring strategic alternatives, including a sale of the money transfer company, after a US government panel nixed its US$1.2 bn sale to China’s Ant Financial. MoneyGram is also working to restructure its debt, which totaled US$902.8 mn as of the end of September 2018 and comes due next year.
Weekly Round-up (27 May – 2 June 2019)
Action continued in the international payments and fintech space with Global Payments agreeing to buy Total System Services for US$21.5 billion in the latest fintech deal, Western Union launching online money transfer service in Thailand, UK fintech Yapily raising $5.4 million to offer a single API to connect to banks, TransferMate Receiving regulatory approval in Singapore, EMQ and Shanghai Commercial Bank partnering on cross-border money transfers across Asia and US fintech Plaid launching in the UK, setting the stage for more fintech companies to expand abroad.
Global Payments to Buy TSYS for US$21.5 bn Deal
American payment technology company Global Payments said last week that it would buy peer Total System Services (TSYS) for about US$ 21.5 bn in stock, adding scale in a fiercely competitive and fast-growing industry. The transaction will create a powerhouse that provides payment technology and software to more than 3.5 mn small to midsize merchants and more than 1,300 financial institutions worldwide. The TSYS/Global Payments combination is expected to be completed during the fourth quarter of this year. Global Payments stressed that the combined company will have exposure to “some of the fastest growing digital payments trends” in some of the hottest markets thanks to TSYS’ issuer and consumer solutions businesses. This marks the third mega-deal in the industry since the start of 2019 and underscores the changing nature of the marketplace. With digital payments growing in popularity, the industry is looking to capitalize and expand its offerings, fueling a spate of mergers. In January Fiserv announced a US$22 bn deal to acquire First Data Corp. Shortly thereafter Fidelity National Services purchased WorldPay for US$34 bn.
Western Union Launches Online Money Transfer Service in Thailand
As a part of its digital expansion plans across Asia, Western Union, leading cross-border money transfer firm announced the launch of online money transfer service in Thailand. Customers in Thailand can now make remittances using the Western Union mobile app or transactional website. Users can make payments natively within the digital channels. The online service, launched in tandem with Central Department Store – one of the largest department store chains in Thailand – will allow customers to remit funds around the world, 24/7, via the Western Union mobile app or transactional website. Customers in Thailand will be able to pay out into billions of bank accounts around the world and in almost 100 countries and territories, or to the company’s upwards of 500,000 agent locations in 200 countries and territories. The trend signals Western Union’s deep commitment to keeping the Asia-Pacific region at the forefront of the digital revolution. Western Union’s digital services align with the government’s Thailand 4.0 policy to create an economy driven by innovation and technology.
UK Fintech Yapily Raises US$5.4 mn in Seed Funding
Yapily, a UK-based fintech startup that offers an Open Banking-based API platform to enable financial services providers and other types of enterprises, such as merchants, to connect to banks, has raised US$5.4 mn in seed funding. Leading the round is HV Holtzbrinck Ventures and LocalGlobe. Investors also include Taavet Hinrikus (TransferWise chairman and co-founder), Ott Kaukver (Twillio’s CTO) and Roberto Nicastro (UniCredit’s former deputy CEO). Yapily helps enterprises of all sizes connect with retail banks through its single API, which allows businesses to connect to all retail banks’ open APIs to retrieve financial data and initiate payments. Yapily was born out of the opportunity created by the Open Banking revolution and is a technology enabler that helps enterprises of all sizes connect with retail banks. Yapily is currently connected to 35 of the biggest banks in Europe, and hopes to reach more than 500 banks by the end of this year. Customers include accountancy firms, companies in the payment space, cryptocurrency providers, digital wealth applications and e-commerce companies.
TransferMate Gets Singapore Licence
TransferMate, one of the leading cross-border B2B payments providers, has secured its first regulatory approval in Asia with a new payments licence in Singapore. This marks a major milestone on the company’s global growth journey, providing its global client base with new inroads into the region’s high-growth markets. With the new license, TransferMate’s footprint will see an increase along with a varied portfolio of payment licenses across the globe. It has already achieved full license approval in 49 US States, Canada, Australia and many more. The firm’s co-founder and CFO Sinead Fitzmaurice said: “Singapore’s global trading links and strong economic contribution to the Asia-Pacific region provides exciting new business opportunities and we look forward to helping our customers achieve their growth ambitions in the region.” TransferMate has received strategic investments from leading banks such as ING Group N.V. and Allied Irish Bank, who have cumulatively invested €51 mn in the company.
EMQ, Shanghai Commercial Bank Team up on Cross-Border Remittances
EMQ, a cross-border settlement network in Asia and Shanghai Commercial Bank, a local Chinese bank in Hong Kong, announced a partnership on cross-border money transfer service across Asia. This collaboration enables SCB’s payment platform to integrate with EMQ’s extensive network infrastructure for secure, compliant, and cost-effective cross-border solutions. At present, EMQ has reach in mainland China, Hong Kong, Singapore, India, Indonesia, Japan, Vietnam, Cambodia, Thailand, Taiwan and the Philippines. Plans are on to expand the network’s presence in other regions across the globe. The latest alliance between SCB and EMQ builds on the pair’s existing relationship, which started in 2015. “With a challenging fragmented market across Asia, businesses and individuals will increasingly require a global money movement network that is versatile while making cross-border money transfers streamlined, low-cost, secure and real-time,” said Max Liu, co-founder and CEO of EMQ.
Plaid Launches in the UK, Setting the Stage for More Fintechs to Expand Abroad
US Fintech start-up Plaid is revving up its global expansion, which should enable the popular apps it powers to do the same. After launching in Canada last year, the VC-backed company announced its UK launch last week. Plaid’s CEO and co-founder Zach Perret said its presence abroad will make it easier for consumers to connect to UK-based fintech apps and for American financial start-ups to expand abroad. Plaid, which is connected to eight of Britain’s largest banks and neobanks—digital-only banks—which it says will give UK fintech businesses instant access to 70% of personal current accounts in the country. Emma, a money-management app, has already plugged into the system, and Plaid says its tech could also help UK firms go international, connecting them with financial firms abroad. Plaid provides tech which allows financial technology companies to link to customers’ bank accounts. In its home country America, the technology is already integrated with 15,000 banks.
Weekly Round-up (20 May – 26 May 2019)
The week of 20-26 May saw action continuing in the international payments and fintech universe with reports of Facebook finalising plans to launch its own crypto-currency next year, TransferWise becoming Europe’s most valuable fintech start-up with a US$3.5 billion valuation, Thailand’s Siam Commercial Bank launching Ripple-powered money transfer service, Canada’s Interac teaming up with Mastercard to offer a new global remittance solution and reports of German fintech Raisin planning to launch in the US market. InstaReM, meanwhile, announced a partnership with Thailand’s Kasikornbank to power cross-border payments in select markets.
Facebook to Launch ‘GlobalCoin’ in 2020
Social Media giant Facebook has set up a new financial technology company in Switzerland focusing on blockchain and payments as well as data analytics and investing. Libra Networks, with Facebook Global Holdings as stakeholder, was registered in Geneva on May 2 to provide financial and technology services and develop related hardware and software, plans submitted on the Swiss register reveal. Facebook, whose social network has more than 2 bn users, did not comment on Libra Networks, which will focus on “investing, payments, financing, identity management, analytics, big data, blockchain and other technologies.” Anonymous sources have claimed that Facebook could release a native stablecoin sometime in the 3Q2019. That could mean advancements on a Facebook-based cryptocurrency — one that would be tied to the US dollar and potentially much more stable than Bitcoin.
TransferWise Becomes Europe’s Most Valuable Fintech
TransferWise, the London-headquartered international money transfer service, last week disclosed a new US$292 mn secondary sale of shares that sees investors value the company at US$3.5 bn, which is more than double the valuation TransferWise achieved in late 2017 at the time of its US$280 mn Series E round. The share purchase was a secondary sale, meaning it consisted entirely of investors purchasing shares form earlier investors. The new investment round makes TransferWise Europe’s most valuable financial technology start-up. The sale was led by Lead Edge Capital, Lone Pine Capital and Vitruvian Partners. The round, which saw no new shares issued or capital raised, is essentially a way for early investors and employees to cash in by selling some of their stock to newer investors. The development is unusual because it effectively serves as a cash-producing “liquidity event,” much like an IPO, at a time when tech companies are going public with decidedly mixed results. TransferWise serves 5 mn customers, processing £4 bn (US$5 bn) a month across 1,600 routes.
Thailand’s Oldest Bank Using Ripple for Cross Border Transactions
Siam Commercial Bank, Thailand’s oldest and third-largest bank, has hinted it will be experimenting with blockchain technology powered by Ripple. Earlier last week, rumors of its blockchain pilot surfaced online after eagle-eyed users took to Twitter to share images of what appears to be a Ripple-based app for cross-border transactions. “Send money abroad today at the cheapest rates via Ripple,” read a screenshot of the app, titled SCB Easy. In April the SCB announced that they have reduced transaction time from 2 days until just 1 minute. As it was confirmed on May 22 this achievement became possible due to the Ripple technology. Moreover, RippleNet also noticed in their blog that SCB is their first client to use ‘multi-hop’. The bank however, has not confirmed whether it would be making use of XRP. The Bank had informed its approach towards blockchain technology in various industries and the XRP community rejoiced after rumours of XRP adoption surfaced. However, when a Twitter user asked about the bank using XRP, SCB said, “We will be using blockchain technology for Ripple but as for XRP, you may have to wait for further announcement”.
Mastercard Partners Interac on New Remittance Solution in Canada
Canadian debit network Interac has teamed up with Mastercard to enable users of its e-Transfer P2P payments service send money to bank accounts around the world. Interac e-Transfer lets Canadians send money directly from their bank accounts to the accounts of other consumers and businesses, using their email address of mobile number. In a press release, the companies said Interac is using Mastercard Send, a push-payments service to send money cross-border, on the Interac eTransfer platform. That will enable customers to send money from Canada to bank accounts in Europe. Mastercard and Interac said National Bank will be the first bank to pilot the new international remittance option for its personal banking clients, who will initially be able to send funds to Europe. Canada is a big market for international payments given its diverse population. Numerous businesses in Canada operate global marketplaces. As much as $25.4 bn in remittances were sent from Canada to other countries.
German FinTech Raisin Eyes US Expansion
German fintech Raisin, a savings and investment marketplace backed by Paypal, said last week it plans to launch in the US market as it seeks to attract savers to higher-yielding deposits offered by its banking partners. Founded in Berlin in 2013, Raisin has brokered 13 billion euros (US$14.5 bn) in deposits for banks that include Germany’s Commerzbank and N26. To date, Raisin has raised about US$200 mn in funding from its investors, and the company recently purchased a German bank. Raisin has hired Paul Knodel, who comes with 20+ years of experience in executive and senior management positions at Citigroup and Merrill Lynch as well as TD Ameritrade, E-Trade and robo-advisor Wealthfront. A few years back, a key market for Raisin was the German saver stuck with a 1% or lower interest rate on savings, but who could grab a better return in Portugal, or even more outside the eurozone in Bulgaria (3% or more). Raisin now has 175,000 customers across Europe and more than 75 bank partners.
Thailand’s KASIKORNBANK Partners with InstaReM
Digital cross-border money transfer company InstaReM announced a partnership with Kasikornbank last week to power cross-border payments for the bank’s customers in select markets. The money transfer company already powers payments for three major banks in Southeast Asia, as well as leading financial institutions around the world. The new partnership will help with InstaReM’s mission to become a leading company in the institutional payments arena. Announcing InstaReM’s partnership, Prajit Nanu, co-founder and CEO of InstaReM said that this relationship further cements InstaReM’s position as a leading provider for cross-border transactions. With InstaReM, KBank clients will be able to realize faster turnarounds, while providing certainty on delivery times and payout amounts. InstaReM was founded in 2014 in Singapore and it has licenses and offices in Australia, Malaysia, Hong Kong, India, Canada, the EU and the US. To date, the startup has raised US$59.5 mn in three rounds.
Weekly Round-up (13 May – 19 May 2019)
Action continued in the global payment and fintech space during the week of 12-19 May 2019 with Singapore-based multi-currency wallet company YouTrip raising US$25.5 million, Social Media giant Facebook forming a fintech firm with payments focus in Switzerland, Remitly acquiring a Seattle-based startup that helps immigrants access financial services, Venture Capital fund Vertex Venture Holdings raising US$230 mn and remittances to The Philippines grew 8.1% during the first quarter of 2019.
Multi-currency e-wallet YouTrip Secures US$25.5mn Funding
Singapore-based payment services company YouTrip raised US$25.5 mn (S$34.9 mn), becoming the latest fintech start-up to attract investor interest. YouTrip’s first VC investment was led by Insignia Ventures Partners and unnamed private investment entities. The funding will be used to drive YouTrip’s expansion in up to two markets in South-east Asia over the next six to 12 months. The firm is one of the smaller firms following in the footsteps of already established challengers in the West like Monzo and Starling. Since its commercial launch in August 2018, YouTrip has clocked more than 200,000 app downloads and completed more than 1 mn transactions for its customers. The digital wallet allows users to pay for goods overseas in more than 150 currencies with no hidden fees and, it claims, at wholesale exchange rates. Several companies have attempted to make overseas purchases cheaper and easier for travelers, including Airwallex, although Airwallex has since pivoted to a different, non-travel financial technology focus. Bank-issued credit and debit cards typically carry an overseas transaction fee that can be as high as 3.5%. Overseas purchases made with credit cards also usually entail a Dynamic Currency Conversion markup, sometimes going as high as 5% or more. YouTrip claims that it does not charge any overseas transaction fees nor markup on foreign exchange conversion.
Facebook Registers New Fintech Firm in Switzerland
Social Media giant Facebook has set up a new financial technology company in Switzerland focusing on blockchain and payments as well as data analytics and investing. Libra Networks, with Facebook Global Holdings as stakeholder, was registered in Geneva on May 2 to provide financial and technology services and develop related hardware and software, plans submitted on the Swiss register reveal. Facebook, whose social network has more than 2 bn users, did not immediately comment on Libra Networks, which will focus on “investing, payments, financing, identity management, analytics, big data, blockchain and other technologies.” Anonymous sources have claimed that Facebook could release a native stablecoin sometime in the 3Q2019. That could mean advancements on a Facebook-based cryptocurrency — one that would be tied to the US dollar and potentially much more stable than Bitcoin.
Remitly Acquires Seattle-Based Immigrant Remittances Start-up
Seattle-based mobile remittance company Remitly has acquired Symphoni, a startup building software that helps immigrant and underserved small business owners access credit. Remitly describes itself as the largest independent mobile remittance company in North America. The company, ranked No. 7 on the GeekWire 200 index of top Pacific Northwest startups, said it was drawn to Symphoni in part because of an aligned mission to navigate the highly-regulated financial services industry. The amount of the deal was not disclosed. The three employees of Symphoni, its co-founders Bayo Olatunji, Amanda Shen, and Marvin Cheng, will now become employed by Remitly’s New Initiatives team. The move comes after Remitly acquired another firm back in 2015. It purchased a firm named Talio, which is a photo sharing app. Remitly has offices across the world alongside its headquarters in Seattle. It is also based in London, Nicaragua and the Philippines.
Vertex Ventures Raises US$230 Mn for Fund IV
Vertex Ventures, backed by Singapore state investor Temasek, announced raising US$230 mn (S$315 mn) in the first close of its latest fund to invest in Southeast Asian and Indian technology start-ups. The firm’s portfolio includes payments start-up InstaReM, online grocery platform HappyFresh and cryptocurrency exchange Binance. Vertex expects a final close for the fund, its fourth for the region, over the next few months. The Singapore-based company, which also has offices in India and China, said the funds will allow it to tap the potential in the venture debt space across Asia. To date, it has supported more than 200 startups with over US$500 mn in financing. Vertex raised US$210 mn for its previous fund two years ago, and this new vehicle is expected to make a final close over the coming few months with more capital expected to roll in. This fund may be the largest dedicated to Southeast Asia.
Remittances to The Philippines Rise to PHP8.1 bn in Q12019
Bank-channeled remittances sent home by overseas Filipinos increased by 4.2% year-on-year to US$7.3 bn in the first three months of 2019, Bangko Sentral ng Pilipinas (BSP) announced last week. The cash remittances or fund transfers coursed through the formal banking system as opposed to personal remittances, was boosted by the 2.5% rise in land-based overseas Filipinos’ transactions. They remitted US$5.71 bn during the period. Sea-based workers, in the meantime, sent home US$1.58 bn which was up by 10.8% year-on-year. The US accounted for the most remittances in first quarter, accounting for 35.1% of the total, followed by Saudi Arabia, Singapore, UAE, UK, Japan, Canada, Qatar, Hong Kong and Kuwait. For the march of March, remittances reached US$2.796 bn, 6.4% higher than the US$2.627 bn posted a year earlier, and 9.3% higher than the US$2.557 bn booked in February. The Philippine’s March remittances was the highest since December 2018.
Weekly Round-up (6 May – 12 May 2019)
The week of 6-12 May 2019 saw continued action in the global payment and fintech universe with the disappointing listing of the ride-hailing pioneer Uber on the New York Stock Exchange (NYSE), UK competition watchdog CMA clearing Visa’s acquisition of Earthport and money transfer fintech TransferGo adding US$ 3.4 million in Series B funding. Meanwhile, the money transfer giants MoneyGram and Western Union reported weak Q12019 numbers last week, but displayed sustained growth in their digital initiatives.
Uber’s Wall Street IPO Disappoints
The ride-hailing pioneer Uber finally made its debut on the NYSE last Friday, trading under the symbol “UBER.” After pricing its IPO at US$45 per share, to raise US$8.1 bn, the shares of the transportation startup opened at $42, down from the IPO price. On a dollar basis, investors who purchased shares in the IPO collectively lost US$618 mn on listing. Uber’s IPO came against a backdrop of turbulent financial markets, fueled by the trade dispute between the US and China, as well as the plunging share price of its US rival Lyft. The listing assigns a valuation to Uber of US$82.4 bn, significantly less than the valuation of up to US$120 bn that its investment bankers predicted earlier. Uber had raised US$28.5 bn as a private company from 166 backers, with its last valuation in the region of US$75 bn. Despite the rocky start, numerous early backers and employees made significant sums of money on listing. Co-founder and former CEO Travis Kalanick’s stake is now worth nearly $5 billion, while some of the early investors in the company finally saw their bets pay off.
UK’s CMA Clears Visa’s Acquisition of Earthport
Global payments giant Visa announced last week that it had acquired control of Earthport, which offers cross-border payment services to banks, money transfer service providers and businesses. The UK’s Competition and Markets Authority (CMA) said that Visa’s acquisition of Earthport by Visa does not qualify for investigation under the merger. The UK listed Earthport was the subject of a bidding war between VISA and Mastercard. The latter eventually withdrew and acquired another company Transfast. The final price paid for Earthport of £247 mn (US$321.1 mn) was almost five times the pre-bid price, an unusually high premium for an acquisition. The buyout of Earthport will bolster the company’s cross-border business, a subset of payment volume, which is captured when an account holder in one country uses his/her payment credentials to make a purchase in another country. Earthport specializes in cross-border payments by maintaining local banking relationships. It has regional offices in New York, Miami, Dubai and Singapore. Visa said that Earthport’s technology will enable it to expand and scale the Visa Direct portfolio.
TransferGo Secures Additional US$3.4 mn in Series B Funding
Money transfer platform TransferGo has raised another US$3.4mn (£2.6mn) in series B funding round. The fresh capital is part of the company’s US$17.5 mn Series B round announced in December. The additional investment comes from French venture capital firm Seventure Partners adding to a series B round. The December round was led by Vostok Emerging Finance and Hard Yaka, with participation from Revo Capital, U-Start Club and Practica Capital. Since launching in 2012, the company said it is now accessible in 47 countries. TransferGo recently closed a crowdfunding campaign on the Seedrs platform after raising €11.1 million backed by over 1000 investors. The company crowdfunded at a pre-money valuation of €58,742,945. In September 2018, the money transfer firm collaborated with Ripple. The partnership was aimed at enabling blockchain-based near real-time transfers to India from European countries. Last August, TransferGo teamed up with Onfido to accelerate enrolment for money transfers.
Wester Union, MoneyGram Post Lower Q1 Numbers, But Strong Growth in Digital
Money transfer firm Western Union posted a net income of US$173.1mn for the quarter ended 31 March 2019 , which is a 19% slump from last year’s income of US$213.6mn. The firm’s revenue was US$1.34 bn for Q12019, a fall of 4% from US$1.39 bn in the previous year. While it missed the Street estimates, it reported strong growth in the digital payments, which were up 19% in Q12019, as westernunion.com saw substantial growth in usage.
Western Union rival MoneyGram also reported Q12019 results that lagged expectations. The company’s Q1 earnings of 21 cents a share were 12 cents below estimates, while revenues were down 17% y-o-y and were below the Street by nearly US$17.6 mn, coming in at US$315 mn. Its money transfer revenues slipped 16% to US$273.3 mn. The company continues to emphasis on digital transactions. MoneyGram pointed to an online market total of 24 (up from three in the past year), and said that apps are available in 17 markets, with a total availability of 26 slated for this summer. The company said its digital transactions were up 107% outside the US. In tandem with that growth, MoneyGram digital revenues outside the US grew by 32%. Digital now accounts for about 16% of money transfer revenues.
Weekly Round-up (29 April – 05 May 2019)
Action continued in the global payments and fintech universe during the week of 29 April-5 May 2019, with Ria Money Transfer joining RippleNet, HK startup Bitspark going live with the beta version of its new web platform, the UK Fintech Startup Checkout.com raising US$230 mn, money transfer firm Remitly doubling its cash pick-up network through a tie-up with Ria Money transfer and The Western Union Company expanding its digital money-moving service across the Middle East. Meanwhile, China ceded its top position as Asia’s top finding source to India as the Chinese government continued to wind down online lending nationwide, rattling investor confidence.
Ria Money Transfer joins RippleNet
Ria Money Transfer, a subsidiary of Euronet Worldwide, has joined RippleNet to enable blockchain-powered global payments. The collaboration between the two companies is aimed at increasing the physical and digital footprint of Ripple, while allowing Ria’s customers to connect and transact with Ripple’s network of more than 200 financial institutions worldwide. Ria’s annual volume is approx US$40 bn, and it ranks No 2 service provider in the remittance industry. Ria will leverage RippleNet technology to gain access to hundreds of financial institutions in Ripple’s global blockchain payment network. Additionally, through Euronet’s Digital Integrated Payments Cloud, the Ria partnership enables existing RippleNet customers to gain new access to Ria’s global fintech ecosystem, enabling cross-border payments both ways.
Bitspark Blockchain Money Transfer Web Platform Goes Live
Hong Kong start-up Bitspark, a bankless money transfer ecosystem, is going live with the beta version of its new web platform that enables users to deposit cash, cryptocurrency or via bank transfer and exchange money using stablecoins in eight major national fiat currencies (USD, GBP, SGD, HKD, AUD, CNY, PHP, EUR). Customers can later exchange these funds between the available currencies and withdraw to cryptocurrency wallets. With this new web platform, Bitspark is aiming to address the liquidity challenge between physical cash and digital currencies. The upgrade will help the company to realize the promise of blockchain and countries with limited or no access to banking infrastructure.
Checkout.com Raises US$230 mn in Record European Series A
A little-known London-based payments provider Checkout.com announced taking funding from outside investors for the first time in its history, raising US$230 mn in Europe’s largest-evet fintech Series A round, and globally the third largest fintech Series A round of all time. The funding round, led by Insight Partners and DST Global, underlines the ambition of the UK business, which is transforming the world of digital commerce by providing merchants with a solution that enables payments across all geographies and channels. Singapore’s sovereign wealth fund GIC, Blossom Capital, Endeavor Catalyst and other strategic investors are also participating in the round. With the capital injection, the startup is ramping up its global expansion efforts in Asia and Latin America, as well as maintaining its growth in Europe, US and the Middle East. Despite stiff competition, Checkout.com has managed to sign up the likes of food delivery company Deliveroo, gym provider Virgin Active, and money exchange app TransferWise. The funding round, values it at almost £1.5 bn or US$2 bn.
Remitly Doubles Cash Pick-up Network Through Tie-up with Ria
Global money transfer company Remitly is collaborating with Ria Money Transfer, part of Euronet Worldwide, to increase its cash pick-up network. Through the tie-up, more than 73,000 cash pick-up locations will be added to the 44 recipient countries served by Remitly. While customers increasingly prefer to send money through digital platforms, global demand for cash disbursement remains strong with over half of the remittances sent through Remitly collected in cash by recipients at physical locations. Through the Remitly global money transfer network, money can be sent around the world by simply going online or using its easy-to-use mobile app to rapidly deliver cash to more cash pick-up locations than ever before. Remitly’s network, which covers regions as diverse as South America and Central Europe, has an annualised volume of more than US$6 bn.
Western Union Digital Expands to Seven Countries Across the Middle East
The Western Union Company’s global digital money-moving capabilities are making significant headway across the Middle East, with seven countries now offering online services, connecting customers to their families and loved ones around the world digitally with the choice to pay for transactions online or in person. The United Arab Emirates was enhanced with the latest generation of Western Union’s omni-channel platform, joining Bahrain, Jordan, Kuwait, Lebanon, Oman and Qatar, as a part of Western Union’s deep commitment to keeping the Middle East at the forefront of the digital revolution. In the UAE, the company launched the Western Union mobile app and relaunched the Westernunion.com website. Customers in the UAE now have the choice to pay for transactions online or within the app via direct transfers from their bank accounts set up in the UAE. While sending cash, the app facilitates real-time account debit or a bank transfer that takes one-to-two business days. Meanwhile, the receiver can either collect the money from a WU agent location or directly deposit the money into their bank account. The cost of transactions remains Dh15.
India Unseats China as Asia’s Top Fintech Funding Source
China’s massive fintech industry took a beating in recent months as the government continued to wind down online lending nationwide, rattling investor confidence. Funding for fintech startups shrank 87.6% y-o-y to US$192.1 mn during the Q1 of 2019, a new report from data provider CB Insights shows. India, which recorded US$285.6 mn raised for fintech startups in the period, overtook China to be Asia’s top fundraising hub for financial technology. In terms of deals, in the Q1 of 2019, the number of VC investments in fintech startups in China declined to 29 from 49 in the Q4 of 2018. In India, the number of fintech deals rose by 61.1% in the Q1 of 2019 when compared to the Q4 eals in Asia during the period between January and March of this year. Due to regulatory tightening in the online lending space, China witnessed the fall as it rattled the investors’ attention. The total global fintech investment increased from US$50.8 bn in 2017 to a US$111.8 bn in 2018, according to KPMG’s The Pulse of Fintech report.
Weekly Round-up (22 April – 28 April 2019)
The week of 22-28 April saw continued action in the international money transfers and fintech space with reports of PayPal investing US$500 mn into Uber as part of its US$90 bn IPO, WorldRemit enabling international money transfers to China UnionPay debit cards in China, and Japan’s SoftBank announcing to invest US$ 1bn in German digital payment provider Wirecard. Ripple continued to attract headlines after the cryptocurrencies major announced its Q1 2019 XRP Market Report and two more partnerships in Asia for international remittance service.
PayPal Plans US$500 mn Investment in Uber
PayPal will invest US$500 mn in Uber, the ride-hailing company revealed in an updated IPO filing on late last week. Uber is preparing to go public on the New York stock exchange, and set its share price at $44 to $50 per share in an amended S-1 filing to the SEC. At the high end, this price would peg Uber’s valuation at around $84 bn to $90 billion. According to the filing, PayPal has agreed to invest in Uber through a private placement at the IPO price. The deal clearly gives Uber another significant piece of financial padding going into its public listing — and it needs it, with a loss of $1 billion in the last quarter alone — as well as a closer commitment from one of its existing payments partners. But it’s also a significant move for PayPal as the company works on building the next stage of its financial services empire. Earlier this month, the company’s self-driving tech group got a US$1 bn investment led by Toyota and it publicly filed with the US Securities and Exchange Commission for a potential US$120 billion initial public offering. On Friday, it set an IPO price range of $44 to $50 a share.
WorldRemit Launches International Transfers to UnionPay Cards
Remittance firm WorldRemit has enabled international transfers to China UnionPay debit cards in China. The Chinese diaspora can avail the service through the WorldRemit app or website and send money home. The service is supported through an alliance with money services business Merchantrade. This increases WorldRemit’s footprint in Asia-Pacific, allowing customers to transfer money to over 14 banks in China, including Industrial and Commercial Bank of China, Bank of China and China Construction Bank. Michael Liu, WorldRemit’s Asia-Pacific Managing Director said: “Asia Pacific is a hugely important market for WorldRemit, with transfers to the region growing by 35% in 2018. We’re further expanding our footprint in APAC by launching digital transfers to all UnionPay cards in China.
SoftBank to Invest €900 mn in Wirecard
Wirecard — a digital payments provider based out of Germany — announced last week that Japan’s SoftBank Group is investing around €900 mn (US$1 bn) as part of a broader digital payments partnership, to help Wirecard expand into Japan and South Korea, as well as build and provide financial services to SoftBank’s extensive list of portfolio companies, which includes the likes of Uber, OpenDoor Labs, WeWork, Grab, DoorDash, Alibaba and more. As part of the deal, the pair have inked a MoU that will see SoftBank support Wirecard’s efforts to expand into Japan and South Korea. Wirecard will also get collaboration opportunities within SoftBank’s payments and financial services portfolio while the companies will also explore the digital lending market. Wirecard’s market value surged to €16.6 bn (US$18.7 bn) in Frankfurt after SoftBank disclosed the investment. Deutsche Bank AG, which is in merger discussions with rival Commerzbank AG, is worth €15.8 bn.
Ripple Announces Q1 2019 XRP Markets Report
Cryptocurrency major Ripple published its first quarterly report of 2019, evidencing considerable growth. In its Q1 2019 XRP Markets Report, the company revealed that they managed to sell over US$ 169.42 mn worth of XRP dollars, which represents 0.32% of the global volume of the token. In Q1 2019, Ripple sold US$61.93 mn of XRP in institutional direct sales and US$107.49 mn of XRP in programmatic sales. In Q1 2019, 3 billion XRP were released out of escrow (one billion each month). Additionally, 2.30 billion XRP were returned and put into new escrow contracts. The remaining 700 mn XRP not returned to escrow are being used in a variety of ways to help support the XRP ecosystem. XRP saw a three-fold gain at the start of the fourth quarter in 2018. But, as the market began to stagnate in December, the price of XRP performed poorly against the USD. YTD, XRP is down 13.67%.
Two More Asian Partnerships for Ripple for Instant Remittance Service
Saudi British Bank (SABB) announced the launch of Cross-Border Transfer Service through the blockchain payment technology powered by Ripple. This service is part of the bank’s strategic plan towards digital transformation and enriching customer experience. In January 2018, SABB was among the first Saudi Banks to join Ripple’s network for blockchain technology, which led to the successful activation of this technology with the Indian Rupee currency of cross-border transfers.
Elsewhere in Asia, Thailand’s Siam Commercial Bank (SCB) announced that it has made a cross-border payments transfer using Blockchain technology, which drastically reduced the transaction time from 2 days to 1 minute. While Ripple was not mentioned in the SCB announcement, in an earlier announcement, the bank had said that it was working with Ripple’s technology for faster cross-border transfers. Also it a blog post, Ripple had acknowledged its involvement with SCB, saying that it was going to be first of its many financial partners who will be using the “multi-hop” feature.
Weekly Round-up (15 April – 21 April 2019)
Action continued in international money transfers and fintech universe with US-based money transfer firm Remitly launching its service to France, Thailand’s Kasikornbank launching cross-border inward remittance service and MoneyGram announcing platform integration with KyckGlobal to provide money transfer services for gig-economy workers. Among the industry updates, India’s central bank unveiled draft framework for Regulatory Sandbox and remittances from overseas Filipinos rose 1.5% in February.
Remitly Brings International Money Transfers to France
Remitly, US-based digital remittance company, has launched its service to France, making international money transfers easy while sending money from France. Customers can access the Remitly service through its mobile app or website and benefit from its convenient money sending and receiving options. Over US$21 bn is sent from France to other countries each year. This money is mostly sent by immigrant workers in France sending money to their families in Morocco, Tunisia, and Senegal etc. Remittances are important to the millions who rely on them. For many on the receiving end, remittances are a lifeline providing them with basic necessities. Traditional remittance players charge billions of dollars in transfer fees and confusing exchange rates. This is money that could help improve their quality of life and provide them with upward mobility.
KBank Launches Cross-border Inward Remittance Service
Thailand’s Kasikornbank (KBank) is ready to kick off its inward remittance service from around the world to transfer funds to recipients’ accounts in over 21 banks using PromptPay on a real-time basis. The conventional process normally takes more than one day. With the use of the KBank platform based on API technology, the service enables remittances up to Bt49,999 per transaction, but not more than Bt10 million per day. The inward funds transfer service is now accepting remittances from Singapore and is set to expand worldwide next year to support international financial transactions in the digital era.
MoneyGram Partners KyckGlobal to Serve Gig Economy Workers
American money transfer giant MoneyGram announced a partnership with KyckGlobal to serve the large and growing population of gig economy workers in the US by enabling them to receive cash payments for their work. The workforce share of gig economy labor has been rising quite steadily over the past few years. About 60 mn people in the US participate in the gig economy, and studies estimate that nearly one-third of these workers prefer same-day payments in cash. Following the partnership with MoneyGram, KyckGlobal expects to serve gig workers by providing them with convenient access to receive their money in cash. This tie-up is another step in line with MoneyGram’s strategy to capitalize on the strengths of its advanced digital and physical network to reach out to new customers in various new ways. KyckGlobal — an innovative fintech company — conveniently plugged into MoneyGram’s API-driven platform to provide customers with convenience and plenty of choices.
RBI Unveils Draft Framework for Regulatory Sandbox
India’s central bank Reserve Bank of India (RBI) released last week a draft of fintech regulatory sandbox framework for stakeholder comments. The draft proposes that fintech startups could participate in an RBI-monitored sandbox to provide fresh industry solutions in tech services such as retail payments, digital KYC and remittance services, among others. (A regulatory sandbox is a controlled environment for commercial testing of new technology with limited regulations and customer exposure.) The RBI’s draft for fintech RS is based on the recommendations of an inter-regulatory working group constituted in July 2016, which had recommended introduction of an appropriate framework for an RS within well-defined space and duration where the financial sector regulator will provide the requisite regulatory guidance to increase efficiency, manage risks and create new opportunities for consumers. The indicative list of products, services and technologies where the RS could be applicable includes retail payments, money transfer services, marketplace lending, mobile technology applications, data analytics and application program interface (API) services. The RBI may consider relaxing, if warranted, some of the regulatory requirements for sandbox applicants for the duration of the RS on a case-to-case basis.
Cash Remittances from Overseas Filipinos up 1.5% in February
Money sent home through banks by Overseas Filipino Workers (OFWs) — which contributes nearly 70% to GDP — grew in February 2019, according to data the central bank released last week, but at the slowest pace in six months due to muted business confidence in the face of global uncertainties. Data from the Bangko Sentral ng Pilipinas (BSP) showed remittances from OFWs amounted to US$2.56 bn in February, higher by 1.2% from US$2.53 bn in February 2018. This brought the cumulative remittances for the first two months of 2019 to US$5.30 bn, representing a 2.3% year-on-year. According to the BSP, cash remittances from land-based workers hit US$3.73 bn in the first two months of the year, rising by 1% from the same period last year. Meanwhile, remittances from sea-based workers hit US $1.06 bn, rising by 10.5% from the same period last year. By country source, the US registered the highest share of overall remittances for the period at 35.5%. It was followed by Saudi Arabia, Singapore, the UK, the UAE, Japan, Canada, Qatar, Hong Kong and Germany.
Weekly Round-up (8 April – 14 April 2019)
The week of 8-14 April 2019 saw continued action in the international payments and fintech universe with the World Bank announcing consumer remittances hit a record high in 2018 and India retained its top spot as the highest recipient of remittances.
Ripple dominated headlines with mixed news. While Japan’s Resona Bank shelved plans to work with Ripple’s Money Tap App, the Ripple-powered MoneyMatch was granted the remittance license by the Malaysian banking regulator and Global IT giant TCS announced using Ripple’s blockchain network for Remittance services. Ripple also announced to expand its headquarters in Singapore.
Meanwhile, a new study claimed that London could soon overtake San Francisco as the fintech unicorn capital of the world.
Record High Remittances Sent Globally in 2018; India Retains Spot as Top-Recipient
In its latest Migration and Development Brief, the World Bank estimates that officially recorded annual remittance flows to low- and middle-income countries reached a record high of US$529 bn in 2018, an increase of 9.6% over the previous record high of US$483 bn in 2017. Global remittances, including flows to high-income countries, reached US$ 689 bn in 2018, up from US$ 633 bn in 2017. India retained its spot as the world’s top remittance recipient with its diaspora sending US$ 79 bn back home in 2018. India was followed by China (US$ 67 bn), Mexico (US$ 36 bn), the Philippines (US$34 bn), and Egypt (US$ 29 bn). The Philippines’ ranking declined by one notch from third place in 2017. Among other key recipients in Asia, Bangladesh remained the 9th highest remittance recipient at US$ 15.5 bn and the Nepali migrants sent home US$ 8.1 bn, making it the 19th biggest beneficiary of remittances.
Japan’s Fifth-Largest Bank Abruptly Pulls Out of Ripple Trial
Resona Bank, Japan’s fifth-largest bank and one of the three banks working with SBI Holdings and Ripple on their cash transfer app Money Tap, is reported to be pulling out of the project. Resona Bank has become the first bank to discontinue its collaboration with Money Tap. The pull out announcement said that the cancellation will take effect on May 13, 2019. It did not provide any reason for the decision, however. Money Tap was launched last October with participation from SBI Sumishin Net Bank, Suruga Bank and Resona. The product provides bank-to-bank money transfers in “real time” using Ripple’s xCurrent payments product. A consortium of 61 Japanese banks —accounting for over 80% of Japan’s banking assets — had agreed to eventually use MoneyTap. MoneyTap is the product of SBI Ripple Asia. Asia has been one of the most important markets for Ripple, where it struck partnership deals with banks in Singapore, Japan, and South Korea among other countries.
Ripple Partner MoneyMatch Gets BNM’s nod for Digital Remittance Services
Malaysian fintech startup MoneyMatch has announced receiving a license from Bank Negara Malaysia (BNM) to carry out digital remittance services for businesses and individuals. MoneyMatch is among the first to receive a nod from BNM’s Financial Technology Enabler Group (FTEG) to offer their clients an eKYC (electronic know-your-customer onboarding technology) service for a seamless online transaction service embedded to the company’s mobile app. MoneyMatch uses Ripple’s xVia to send funds internationally. The firm completed its first-ever cross-border transaction using Ripple’s xVia solution. The services currently allow the firm to process transfers of funds from Malaysia to Europe. Since it started in June 2017, it has transacted over RM450 mn in transaction value for thousands of individuals and business customers. It also targets to expand to Australia as it recently obtained a licence from Australia Securities and Investments Commission to provide remittance services.
Global IT Giant TCS Using Ripple’s Blockchain Network For Remittance Services
Global IT giant Tata Consultancy Services (TCS) has announced the release of its Quartz Cross Border Remittances solution. TCS has been deploying its Quartz Blockchain Solutions for enterprises in the financial services value chain, leveraging the technology for its agility and ability to significantly reduce transaction costs. The Quartz Cross-Border Remittances solution enables banks/payments systems to connect to newer DLT-based payment infrastructures like RippleNet for processing of cross-border FX remittance transactions. The Quartz Gateway seamlessly connects the TCS BaNCS Payments system to the blockchain-based payments platform using APIs. Mumbai-based TCS is part of Indian multinational conglomerate, the Tata group. Its global banking platform TCS BaNCS services more than a quarter of the world’s population, processing more than one billion accounts.
Ripple Expands Singapore Office
Blockchain giant Ripple is expanding its headquarters in Singapore to stay vigilant to the requirements of its regional customers. Ripple intends to increase its headcount of 12 staff to about 24, and grow the range of its operations beyond basic customer-servicing. Ripple is still expanding its reach in the Asian region in a bid to push for cryptocurrency integration in the rapidly growing region. “The demand here is significant, so it’s an easy decision for us to continue to invest in this market and make sure that we can also seek out new customers, new partners and new ways that we can work with the market,” said Eric van Miltenburg, senior vice-president of global operations Ripple. About half of Ripple’s clients are located in Asia, including InstaReM, CIMB Bank, SCB and BDO. The company also has a longstanding relationship with the Japanese financial giant SBI, which invested in Ripple back in 2016.
London On Track to Become Global Fintech Hub: Report
London could soon overtake San Francisco as the fintech unicorn capital of the world, according to a new study. Of the world’s 29 fintech unicorns – private companies valued at more than US$1 bn – nine are based in San Francisco, while seven are headquartered in London, the research said. The city has firmly cemented itself within Europe with over a third (39%) of European venture capital funding going to London fintechs. That is almost double any other city in Europe – Berlin (21%), Paris (18%), Stockholm (5%), Barcelona (4%), Amsterdam (4%), Zurich (3%), Copenhagen (2%) and Dublin (2%). Job creation within the fintech space in London increased by 61% over the past year as the City cemented its standing as a global hub for financial technology startups, according to data from Robert Walters. But there could be trouble ahead. “With this increased hiring, the UK’s pending departure from the EU could serve to stifle fintech candidate pools,” said the Robert Walters report.
Listen to our March 2019 Fintech Monthly Podcast here.
Weekly Round-up (1 April – 7 April 2019)
Action continued in the international Remittances and Fintech space during the week of 1-7 April with the UK’s competition watchdog announcing to investigate into Visa’s planned acquisition of Earthport; Western Union partnering with startup Coins.ph for digital push in the Philippines; Remitly introducing custom money transfer service to more cruise ship workers; a co-founder of Chinese tech giant Tencent investing US$2 mn in Singapore fintech startup Koku, the reports of TransferWise being in talks to raise US$300 mn and the blockchain-based fintech Everex signing a deal with Krungthai Bank & SHWE Bank.
UK Competition Watchdog to Probe into Visa’s Acquisition of Earthport
Britain’s Competition and Markets Authority (CMA) said last week that it was investigating into payments giant Visa’s planned acquisition of the payment company Earthport to gauge if the deal would reduce competition in the country. Visa agreed to buy Earthport for about £247 mn (US$321.45 mn), edging out smaller rival Mastercard in a bidding war. The CMA is also seeking written representations about any competition issues that are likely to emerge from the proposed transaction and has given a timeline of 4 April to 18 April 2019 for interested parties to give their feedback. Visa’s initial bid valuing the cross border payments company at £198m was trumped by Mastercard’s £233 mn in January.
Western Union Partners with Coins.ph to Serve Filipinos
Global money transfer leader Western Union has announced a partnership with Coins.ph, one of the leading e-wallet providers in the Philippines. The partnership will allow more than 5 mn customers to receive money transfers directly into their Coins.ph wallets. Users can receive up to as much as PHP 100,000 or roughly US$1,907 per month, the maximum wallet capacity. The integration of blockchain technology of Coins.ph and vast agent network of Western Union will provide good remittance services to customers. The Philippines is a leading recipient of remittances. There are some 10 mn Filipinos based overseas and a recent World Bank report ranked the company the world’s third-most lucrative corridor with an estimated US$34 bn sent home from overseas last year. Coins.ph is a blockchain-enabled mobile wallet startup backed by Indonesia’s ride-hailing giant Go-Jek.
Remitly Introduces Custom Money Transfer Service to more Cruise Ship Workers
Remitly, America’s leading digital remittance company in North America, has expanded its custom money transfer service for cruise ship workers. The service named “Remitly for Seafarers”, is specially designed for workers on cruise ships who need to send money to their loved ones while they’re away at sea. Remitly for Seafarers is available to seafarers who need to send money to the Philippines, India, and Indonesia without leaving their ship. There are more than 1.6 mn seafarers in international shipping. The process of using money transfer kiosks at ports or on ships often requires long lines and exorbitant fees. Remitly CEO and co-founder Matt Oppenheimer said: “Seafarers make tremendous sacrifices for their families, leaving home for long periods of time to support their families and communities.
Tencent Co-Founder Backs Singaporean Fintech Startup with SG$2.7 mn Investment
Singapore-based KOKU has raised SG$ 2.7 mn (US$2 mn) in pre-series A funding to accelerate its expansion in Southeast Asia, in a round led by Jason Zeng, co-founder of Tencent Holdings and founder of Chinese angel investment company, Decent Capital. The funding will be used by the Singaporean fintech for further development of its product, and regional expansion into other Southeast Asian markets. Koku works with non-bank financial intermediaries like remittance service and liquidity providers in Singapore, Hong Kong and Philippines by providing FX technology solutions that allows them to then offer cheaper and quicker remittance services. The company targets to raise US$10 mn in its Series A funding in the first half of this year.
TransferWise Seeks US$300 mn Funding
UK-based cross-border money transfer fintech TransferWise is in talks to raise new funds, according to reports. The startup, backed by entrepreneur Richard Branson and PayPal founders Peter Thiel and Max Levchin, is looking to raise as much as US$300 mn, which would value the firm in the region of US$4 bn. It has been noted by experts that fintech firms that handle international payments are now more popular than before. Fintechs that help move cash across borders have disrupted the banking industry due to their affordable overseas transfer rates. In January, the company said it was opening an office in Brussels, Belgium to avoid any potential impact on its business from Brexit. Launched in 2011, TransferWise has more than 4 mn customers and a transfer volume of more than $4bn per month.
Blockchain-Based fintech Everex signs deal with Krungthai Bank, SHWE Bank
Everex, blockchain-powered digital remittance platform, announced last week that it has signed an agreement with Thailand-based Krungthai Bank and SHWE Bank from Myanmar. The deal will see the three entities jointly introduce a cross-border, blockchain-powered money transfer services between Thailand and Myanmar. The Ethereum-based new service called “Krungthai Bank and SHWE Bank Remittance powered by Everex”, will allow customers to transfer money via smartphones with competitive exchange rates. Customers will be able to use the secure Everex wallet on their smartphone to send automated cross-border transactions to the recipient’s front door, with greater speed and competitive exchange rates. The bank believes that this new service will meet Myanmar labors needs for convenient cross-border remittance services.
Listen to our March 2019 Fintech Monthly Podcast here.
Weekly Round-up (25 March –31 March 2019)
The week of 25-31 March saw continued action in the international payments and fintech space with tech giant Apple announcing the launch of a credit card in partnership with the US banking giant Goldman Sachs; the cross-border remittances firm Airwallex becoming a unicorn after a US$ 100 mn funding round; reports of TransferWise selling stake in the new funding round; Remitly partnering with payments giant Visa for cross-border money transfers to debit cards; payments giant Worldpay announcing expansion into Australia and New Zealand to drive growth; and reports of India’s central bank planning to issue guidelines for setting up Regulatory Sandbox for fintech startups.
Apple Launches Apple Card, A Credit Card for iPhones
Global tech giant Apple announced last week that it will launch a credit card with American banking giant Goldman Sachs this summer that can be used to earn cashback on the purchase of Apple products. The Apple Card will sync with iPhone’s users’ Apple Wallet and work through its payment system Apple Pay. The physical credit card will be made of titanium – laser-etched with users’ names but no numbers as a security feature. The card, which will be issued by Goldman Sachs and will use the Mastercard network, will come with new features in the Apple Wallet to help users track their spending with a breakdown of monthly purchasing. Designed with simplicity, transparency and privacy in mind, this new Apple Card is claimed to help consumers lead a healthier financial life. Customers can sign up for Apple Card in the Wallet app on their iPhone in minutes and start using it with Apple Pay right away in stores, in apps or online worldwide.
Airwallex Achieves Unicorn Status with Latest Round of Funding
Australia-based Airwallex announced last week the closing of a US$100 mn Series C round that values its business at over US$1 bn. This new round of funding is led by DST Global — the high-profile investor that has backed the likes of Facebook, Twitter, Spotify, Xiaomi and more — with participation from returning investors that include Sequoia China, Tencent, Hillhouse Capital, Gobi Partners, Horizons Ventures and SquarePeg Capital. The funds will be used to expand Airwallex’s suite of international collection and payment products, and support global expansion into the US, Britain/Europe and South-east Asia. In the future, Airwallex wants to launch a credit card, as well as apply for a banking license. Founded in 2015, Airwallex effects international money transfers through a combination of payment collection, foreign exchange, and local payment distribution. Meanwhile, the company has chosen London as a base for its new European headquarters.
TransferWise Announces PayNow Funding Option
London-based fintech firm TransferWise announced last week that it has added PayNow to its other payment options like credit card, debit card and bank transfer. To make transactions using PayNow on TransferWise, users need to input the company’s unique entity number to their PayNow app or scan a QR code provided. The service can also be accessed via desktop or mobile apps. In another update, TransferWise is seeking to sell a stake in itself in a new fundraising round. TransferWise, one of Europe’s best-funded financial technology firms, is seeking to raise up to US$300 mn, which would value the company at around US$4 bn. The latest fundraising round is reportedly being organised by Goldman Sachs. TransferWise’s last fundraising round came in 2017, giving TransferWise a valuation at the time of more than US$1.6 bn.
Remitly Partners with Visa to Enhance Cross-Border Money Transfer Service
US-based Remitly announced an agreement last week to add another channel to its digital money transfer platform through Visa Direct, Visa’s real-time push payments platform. Remitly and Visa plan to provide the ability to send funds from the US to eligible Visa debit cards across borders. Remitly will use Visa Direct to unlock more choices for its customers to send cross-border payments in real-time to eligible Visa debit cards in multiple countries around the world. According to Remitly co-founder and CEO Matt Oppenheimer its highest priority is to create the best possible money transfer experience for immigrant communities and their families around the world. Remitly describes itself as the largest independent mobile remittance company in North America, and it has 800+ employees worldwide.
Worldpay Targets Growth in Australia and New Zealand
Payments group Worldpay announced last week that it is expanding its business in Australia and New Zealand. The payment technology giant will open two offices in Australia as it seeks to benefit from rapid growth in the country’s almost US$30 bn e-commerce industry. Worldpay’s new offices will be located in Melbourne and Sydney, with Sydney acting as the country headquarters. The new sites will not only help to better serve existing clients with rich payments expertise, solutions consulting and on-the-ground account management, but also deliver on Worldpay’s ambitious plans to boost its client roster. It will first target businesses in the online retail, travel, digital content and online gaming industries. Worldpay was also granted a payments license to operate in New Zealand. Earlier in the month, WorldPay was acquired by Fidelity National Information Services in the biggest deal to date in the fast-growing electronic payments industry, valuing the company at US$43 billion.
India’s RBI to Set Up Regulatory Sandbox for Fintech Startups
India’s central bank and banking sector regulator, the Reserve Bank of India (RBI) will issue guidelines for a regulatory sandbox for financial technologies in the next two months, its governor said last week. He will meet fintech companies this week to understand the issues they face. The RBI governor Shaktikanta Das said the regulatory sandbox will help fintech companies launch innovative products at a lower cost and in less time. The sandbox will enable fintech companies to conduct live or virtual testing of their new products and services. These companies will also be able to test the viability of the product without a wider and expensive rollout. Das said that there is a need for a definite regulatory and supervisory framework for the fintech startups. The framework is really important at this point to protect the customers and safeguard the interests of all stakeholders.
Listen to our March 2019 Fintech Monthly Podcast here.
Weekly Round-up (18 March –24 March 2019)
Action continued in the international money transfers and fintech space during the week of 18-24 March as InstaReM announced a partnership with First Data to help businesses to issue corporate credit cards shortly after closing its US$ 41 mn Series C round of funding. Among other noteworthy developments of the week, global tech giant IBM launched blockchain-based global payments network that will rival the SWIFT; FIS (Fidelity National Information) agreed to buy Worldpay for about $35 bn and Wester Union teamed up with Thunes to expand payout capabilities to mobile wallets.
InstaReM Raises US$ 41mn in Series C Funding Round; Partners with First Data
Singapore-headquartered InstaReM, a fintech startup that helps banks and consumers send money overseas at lower cost, has closed a US$41 mn Series C financing round to go after global expansion opportunities. The final close of US$20 mn was led by Singapore-based Vertex Growth Fund and supported by new investor, Atinum Investment from South Korea. The overall Series C round was completed in two phases, with the first US$21 million closed in late November last year. The proceeds of the latest round of funding will be used to accelerate growth in existing and new markets, with InstaReM expected to receive licences in Japan and Indonesia later this year. InstaReM’s next-generation payments platform makes it possible to send local ACH or real-time payments in over 50 countries, to issue virtual or physical cards in 25 countries and collect payments for SMEs in 35 countries. In another update, InstaReM also announced a partnership with First Data to assist businesses that issue corporate credit cards. The partnership will combine InstaReM’s digital payments and remittance solution with First Data’s debit processing solution for businesses like corporates and FinTech firms that need to issue cards to employees, vendors or consumers.
IBM Launches Global Blockchain-based Payments Network
American IT giant IBM announced last week that IBM Blockchain World Wire, its real-time global payments network for regulated financial institutions, is officially accessible in a number of markets. Designed to optimize and accelerate foreign exchange, cross-border payments and remittances, World Wire is the first blockchain network to integrate payment messaging, clearing and settlement on a single unified network, while allowing participants to dynamically choose from a variety of digital assets for settlement. The network is able to transfer funds to more than 50 countries using 47 digital coins backed by fiat currencies. The network claims to be the first to allow real-time clearing and settlement. To facilitate transactions on IBM’s World Wire, financial institutions who are transacting with each other, will agree on the use of a stablecoin or a central bank backed digital currency. Currency Matters, a company that facilitates forex and overseas payments, announced that it will join the network.
FIS Buys Worldpay for US$35 bn
The US financial services provider FIS (Fidelity National Information Services) announced last week to buy Worldpay for about US$35 bn in one of the biggest deal to date in the fast-growing electronic payments industry. Both FIS and Worldpay provide technological infrastructure that lets consumers securely make electronic payments locally as well as internationally. The financial technology sector is consolidating fast as more people switch from cash to digital payments for online and high street sales. Fiserv bought payment processor First Data in January for US$22 bn. The industry also faces a growing base of startup competitors. Now that those startups are maturing, the financial data processing industry is ripe for mergers and acquisitions. Established companies are buying fintech rivals or startups that can help them expand their offerings or their territories. The global payment processing market is currently valued at US$1.4 tn and is expected to grow by another US$1 tn by 2027, according to BCG.
Worldpay Becomes First Acquirer to Enable Amazon Pay
In another update last week, Worldpay announced that it has teamed up with Amazon, making it the first acquirer enabling Amazon Pay for its merchants. Through this relationship, Worldpay merchants that accept payments in the US can utilize Amazon Pay, providing an expedited, consistent and seamless online checkout experience. Through Worldpay’s API, online merchants can easily integrate and add Amazon Pay to their website. Merchants can now enable Amazon Pay, with Worldpay as both their gateway provider and acquirer. With this integration, Worldpay, — one of the more ubiquitous providers of payment technologies processing 40 bn transactions worth some $1.7 tn annually through 300+ payment options and 120 currencies — will now be offering Amazon Pay as part of that mix, so that any merchant can offer this as a payment and shipping option to its customers. The partnership helps to take Amazon Pay outside of the ecommerce giant’s own ecosystem and into the wider world, tapping into a Worldpay network. With Amazon Pay, buyers are able to use their Amazon credentials to check out at merchant sites in what is billed as a smoother, quicker transaction.
Western Union Partners Thunes for Mobile Wallet Transfers
Global money transfer giant Western Union has teamed up with Thunes, a cross-border payments network for emerging markets, to enable Western Union customers to send funds directly into mobile wallets around the world. With this, senders can utilise Western Union’s digital network or an agent location to send funds directly into a recipient’s mobile wallet. The collaboration will enable greater financial access for consumers – especially those who lack access to traditional financial services – by connecting them to alternative payment solutions, such as mobile wallets, that ultimately help drive better financial inclusion on a global scale. Thunes is a rebranded segment of Singapore-based fintech company TransferTo, which runs a remittance hub focused on providing access to mobile wallets in developing markets. Thunes’ platform connects global payment providers and allows interoperability amid diverse payment systems, which in turn, would be beneficial to Western Union clients.
Listen to our February 2019 Fintech Monthly Podcast here.
Weekly Round-up (11 March –17 March 2019)
The week of 11-17 March saw continued action in the international money transfers and fintech universe with Mastercard acquiring cross-border remittances firm Transfast, a Wall Street analyst predicting billions in additional revenue from ‘Facebook Coin’, PayPal’s Xoom service raising cross-border remittance cap to India to US$ 50,000, Western Union testing a Ripple solution for cross-border money transfers and The Philippines and Nepal reporting increase in inward remittances.
Mastercard is Acquiring Transfast
Mastercard has dropped its Earthport bid and instead acquired cross-border account-to-account money transfer network Transfast. Transfast will be used to improve its compliance capabilities and offer foreign exchange tools. Financial details about the deal were not disclosed. The buyout will complement Mastercard’s existing suite of payment solutions. The deal is likely to expand the company’s connectivity worldwide in the account-to-account space, enhance compliance capabilities and enable it to offer superior foreign exchange tools. Mastercard’s Mastercard Send solution for business-to-business (B2B) and person-to-person (P2P) payment services is already supported by Transfast. Consequently, the deal will expand the company’s cross border business.
Facebook’s “Crypto” Currency Expected to Add Up to US$19 bn in Revenue
Facebook is reportedly developing a cryptocurrency that could be part of a multibillion-dollar revenue opportunity, Barclays internet analyst Ross Sandler said in a note to clients last week. Sandler forecasted as much as US$19 bn in additional revenue by 2021 from “Facebook Coin.” Sandler gave both an upper and lower estimate of the opportunity presented by the launch of the new digital currency. Whilst not quite the almost US$20 bn upper estimate, the internet analyst’s conservative reckoning was still an impressive US$3 bn over the same two-year period. Sources reported by the New York Times claim that the social network plans to initially make its stable-coin available through its instant messaging application, WhatsApp. However, Facebook itself is yet to detail the project.
PayPal Hikes Cross-Border Remittance cap to India to US$50,000
PayPal has increased the limit of cross-border remittances to US$50,000 from US$25,000 in 2018 and US$10,000 in 2017, to keep up with demands of US customers, particularly the NRI community in North America. With a higher disposable income, the average NRI is sending more money home than before. With customers getting more tech-savvy, cash-based wire transfers are declining. By raising Xoom’s transfer limits, PayPal will be able to accommodate a broader base of remittance customers. The company hopes this move will allow it to take customers from Western Union and MoneyGram, which currently dominate the global remittance market. Established in 2001 and acquired by PayPal in 2015, Xoom, PayPal’s international money transfer service, has been opened in over 30 countries, including India, Canada, France, Germany, and UK.
Western Union Continues to Test Ripple’s Solutions for A Potential Partnership
During the World Economic Forum in Davos last week, Western Union’s CEO Hikmet Ersek said that the company is not done yet exploring whether Ripple’s solutions can enhance the company’s settlement system. “The main reason for [the partnership] was optimizing our settlement system, to really manage the volatility. We tested with Mexico, one of our biggest corridors – the US to Mexico, dollars to pesos,” he said. Ripple has some powerful solutions to offer for cross-border payments, and this is what will make more banks and financial institutions ditch the traditional payments system and move towards more innovative solutions. Euro Exim Bank has already made this move and ditched SWIFT in favor of Ripple’s XRP-powered xRapid.
OFW Cash Remittances up January 2019
Remittances sent by expatriate Filipinos to their local beneficiaries rose slightly in January, thanks to increased volumes sent home by both land- and sea-based overseas workers. The Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno last week that personal remittances from the country’s workers stationed abroad grew by 3.4% year-on-year in January 2019 to reach US$2.75 bn from US$2.66 bn in the same period last year. By country source, the United States registered the highest share of overall remittances at 35.5 percent, followed by Saudi Arabia, Singapore, United Kingdom, United Arab Emirates, Japan, Canada, Qatar, Hong Kong and Kuwait.
Remittance Inflows into Nepal up 28.5%
Workers’ remittances in the first seven months of the fiscal year swelled 28.5% year-on-year, providing a much needed cushion to Nepal’s depleting foreign exchange reserves. During the same period last year, remittance inflows had inched up 1.7%. According to the latest macroeconomic report released by Nepal Rastra Bank, the country’s central monetary authority, the money sent back by Nepalese migrant workers in different countries totalled NPR 515.55 bn during the period mid-July 2018 to mid-February 2019, despite a sharp drop in worker departures. Industry experts attributed the surge in remittance to the increased use of formal channels by migrant workers to send their earnings home. The practice of using informal channels like hundi to transfer money has decreased recently.
Listen to our February 2019 Fintech Monthly Podcast here.
Weekly Round-up (04 March – 10 March 2019)
Action continued in the international money transfers and fintech universe during the week of 4-10 March with MasterCard announcing to drop its bid for Earthport, WorldFirst announcing acquisition of CurrencyVue, UK fintech major Revolute attracting some bad press and UK’s FinTech body Innovate Finance launching an educational initiative Fintech for Schools. Meanwhile, Remittance and Fintech firms worldwide took note of the women’s contribution to fintech on the International Women’s Day.
Mastercard Drops Bid for UK’s Earthport, Agrees to Buy Transfast
Global payments giant Mastercard announced its offer window to buy Earthport had lapsed, which potentially clears the way for rival Visa to make a bid for the British cross-border payments company. Earthport has been witness to a bidding battle between Mastercard and Visa since last December. The company, which had earlier backed Mastercard’s bid, most recently urged shareholders to accept Visa’s higher offer. Visa made a surprise £198m bid for Earthport over the festive season. But Mastercard tried to outbid its rival with its £233m bid, forcing Visa to return with an improved £247m package. Mastercard, meanwhile, has announced to enter into an agreement to acquire Transfast, a global cross-border account-to-account money transfer network. Transfast covers over 125 countries across Asia, Europe, Africa, Americas and Australia. Transfast is expected to complement Mastercard’s wide range of payment solutions by increasing worldwide connectivity in the account-to-account space, enhancing compliance capabilities and offering more robust foreign exchange tools.
WorldFirst’s CurrencyVue Takeover Signals B2B Payments Push
Payments fintech WorldFirst announced successful acquisition of the Australian CurrencyVue platform last week. CurrencyVue has been developing a unique platform that integrates with global ERP and well-known accounting systems to provide users with a real-time view of their international payments and currency exposures. The new capabilities will enable WorldFirst’s SME and online seller clients to integrate their international transactions and exposures with leading platforms such as Xero, Netsuite and Quickbooks. The platform also enables businesses to automate payments of foreign currency invoices. The integration of CurrencyVue’s platform means businesses will have access to a holistic view of their finances, including foreign exchange commitments, and an ability to manage these through direct access to WorldFirst’s hedging products. WorldFirst itself has been acquired by Ant Financial in a US$700m deal last month.
Fintech Firm Revolut Hit by Slew of Negative News
Revolut, the UK money-transfer fintech unicorn, hit the headlines for all the wrong reasons last week.
In early March, Revolut confirmed that its CFO Peter O’Higgins had resigned after a Daily Telegraph report revealed that Revolut switched off an AML system. As a result, thousands of transactions passed through Revolute’s digital banking system without having been fully checked for sanctions compliance. However, Revolut has denied the report, saying this was part of a “systems enhancement project” being tested in parallel with other compliance controls.
In another news, the London Police received a complaint from a Revolut customer about the length of time it took to transfer £70,000 after bank details were incorrectly entered at the payment stage. However, Revolut said that there is no fraud investigation being undertaken by the police.
Also, claims that Revolut has links with the Russian government have been causing controversy in Lithuania. Lithuanian parliament’s budget and finance committee has accused Revolut of being involved with the Kremlin. The Revolut CEO has denied that his company has links to the Kremlin.
Meanwhile, Wired magazine ran a feature on what it called “the human cost” of Revolut’s rise. The story detailed people being asked to work for free as part of job applications, excessively long hours, a culture of “hitting targets at all costs”, and high staff turnover. Revolut has pushed back, saying post that it has already addressed the issues raised in the Wired article, saying that “the allegations in the media over the past week are not an accurate reflection of the company that we are today.”
UK FinTech Body Launches “FinTech for Schools” Initiative
Innovate Finance, an advocacy group for the UK Fintech industry, has launched the “FinTech for Schools Initiative,” seeking to inspire the next generation of Fintech leaders innovators. FinTech for Schools is an important piece of Innovate Finance’s Skills and Talent work, which aims to support a future domestic pipeline of talent as well as showcasing the various skills initiatives of its members in one, easily accessible place during a challenging time politically as Brexit nears. The FinTech for Schools campaign is designed to encourage young people to understand the increasing importance of digital skills in the workplace, with an emphasis on ensuring the sector is appealing to girls. Approx 76,000 people are employed in the UK fintech sector and there are 1,600 UK companies. Out of that, 42% of the workforce is from overseas. However, only 6% of UK deals had a female founder – and that represented a mere 3% of total capital invested in UK fintech in 2018.
Women in Fintech
On the occasion of the International Women’s Day (IWD) on 8th March last week, fintech firms and associations across the globe took stock of contribution of women in Fintech universe while promising to do more for them.
A study commissioned by WorldRemit showed that the gender gap among senders of remittances to the Philippines narrowed in the last four years, even as female overseas Filipino workers (OFW) tend to earn less than males. The survey showed that the number of female OFWs who sent money home made up 35% of WorldRemit’s clients in 2018, up from just a 25% share in 2014. InstaReM revealed that migrant women in the UK, despite being the primary source of care for their families back home, pay up to 20% more than men to transfer money abroad.
Aside from the gender pay gap, women also face other challenges. Female entrepreneurs often have problems accessing mentorship and even have a difficult time looking for venture capital. Innovate Finance’s annual Venture Capital Investment Report revealed that female founders make up just 17% of Fintech companies and only 3% of the $1.7b UK VC FinTech investments made in 2018 went to businesses with a female founder. Global payments fintech PayPal noted that women make up nearly half the American workforce and are steadily outpacing men in educational achievements and entrepreneurship, and the number of women-owned firms grew 45% between 2007 and 2016, a rate five times faster than the national average. Meanwhile, 20 women in the India’s Fintech industry were awarded the ‘Women in FinTech Awards (WIFA)’ as part of the third edition of fintech conclave ‘Fintegrate Zone’ in Mumbai. The WIFA aspires to raise awareness around women’s contribution to the ecosystem, and to encourage more women to bring a real change.
Listen to our February 2019 Fintech Monthly Podcast here.
Weekly Round-up (25 February – 03 March 2019)
The week of 25 February-3 March saw continued action in the International Money Transfers and Fintech universe with ACI acquiring Western Union’s US bill pay business, a New York Times report on update of Facebook’s cryptocurrency plans, Tradeshift announcing a new app integration from TransferMate Global Payments, China’s Ping An Insurance planning IPO of its fintech unit, reports of Japan’s big banks ending international cash remittances and Korean banks being ordered to open up payment systems to fintech firms. Meanwhile, fintech investments continue to boom in China and HK despite the looming US-China trade war.
ACI to Purchase Western Union’s Speedpay Business
Global remittances giant Western Union and ACI Worldwide, the provider of real-time electronic payment and banking solutions, entered into an agreement last week for ACI to acquire Speedpay, Western Union’s American bill pay business, for US$750 mn. The combined ACI-WU business will service over 4,000 customers across the US and have reach that expands into consumer finance, insurance, healthcare, higher education, utilities, government and mortgage. Divesting the Speedpay business allows WU to concentrate its resources on its cross-border money movement strategies and monetise a non-core asset. The Western Union roadmap is on cross-border, cross-currency fund flows done digitally and over mobile devices, well beyond what is considered today as WU’s firm hold on the global remittance space. The transaction is expected to close by the end of the second quarter of 2019.
‘Facebook Coin’ Coming in First Half of 2019: The New York Times
Facebook is edging closer to launching its own cryptocurrency, with a rollout expected this year, according to The New York Times. Some of the world’s biggest internet messaging companies are hoping to succeed where cryptocurrency start-ups have failed by introducing mainstream consumers to the alternative world of digital coins, the New York Times said. Facebook is keeping its cryptocurrency plans under wraps, even from the other company employees. The social media giant silos off its secretive cryptocurrency team in an office that requires entirely different key-card access so that other Facebook employees can’t enter. In December, Bloomberg reported that Facebook was planning to roll out a stablecoin for WhatsApp. However, the NYT report revealed that the company plans to integrate the cryptocurrency into two of its other major properties – Instagram and Messenger, which would give the coin an unprecedented level of exposure. The audience of the three apps reaches 2.7 bn monthly users.
Tradeshift Adds TransferMate App to Ecosystem
Tradeshift, a supply chain payments and marketplaces major, announced a new app integration from TransferMate Global Payments, which will make it easier for global commercial buyers and sellers to digitally connect along every transaction phase. The new solution automates same-day cross border payment services from commercial transactions anywhere in the world more accurately, securely, and with lower fees than traditional correspondent banks. The easy integration of new app by TransferMate takes away the issue of complexity while increasing speed, reconciliation and transparency. It also saves time by giving Tradeshift customers the ability to finish off all last-mile payments across the border.
Ping An Plans IPO of Fintech Unit at US$8 bn Value
Ping An Insurance, China’s largest insurer, is gearing up for an IPO of its OneConnect unit that could value the financial management portal at about US$8 bn, according to a Bloomberg report last week. Ping An is targeting to list OneConnect in Hong Kong as soon as the second half of this year, and the share sale could raise roughly US$1 bn. The insurance giant initially had a fundraising goal of as much as US$3 bn last year, before an increasingly volatile market forced it to push back the listing plan. OneConnect offers services to small to mid-sized financial firms, having partnered with hundreds of banks and more than 1,800 non-bank financial companies. The company has a US$ 650 mn Series A financing round under its belt, which valued the company at US$7.4 bn.
Japan’s MUFG and Mizuho to End Overseas Cash Transfers
Japan’s top banks MUFG Bank and Mizuho Bank will soon stop offering international cash remittances at branches in a move to combat money laundering. MUFG Bank, which currently offers international cash remittances for ¥ 5,000 to ¥ 5,500 (US$ 45-50) from its branches, will stop on June 3. Senders will have to remit money from their accounts, and the bank will encourage the use of online banking by keeping that remittance fee at ¥ 2,500. Unlike online transfer services, physical remittances involve little in the way of compliance or customer identity checks. Over-the-counter cash remittances do not go through a rigorous compliance process, leading to the possibility of misuse. Many regional banks have already stopped remitting cash overseas.
Korean Banks’ Payment Networks to Be Opened to Fintech Firms
Korea’s Financial Service Commission (FSC) is introducing new rules that will force the nation’s banks to open their payment systems to third party fintech firms in a move designed to increase competition and promote innovation in the sector. The current financial payment network has a closed system accessible only by banks. With the open banking system, consumers will be able to manage and control their multiple bank accounts in one place and make easy and fast money transfers. Fintech firms registered as payment service providers would be required to pay banks commission fees that may be about 90% lower than the current rates for accessing their customers’ transaction data because they won’t need to enter into a partnership with each bank under the open banking system.
Fintech Booming in China and HK Despite Looming Trade War
Global investment in fintech ventures more than doubled in 2018, to US$ 55.3 bn, led by a surge in funding in China and strong gains in several other markets as investors placed larger bets in more mature startups, according to Accenture analysis of data from CB Insights. China accounted for 46% of all fintech investments in 2018. More than half of China’s fintech investment came from the record US$14 bn funding round in May of Ant Financial, which manages the world’s largest money market fund but is perhaps best known for its Alipay mobile payments service. Despite the fact that U.S. authorities have raised their scrutiny of foreign-backed investments and pulled the plug on some Chinese-backed deals, the value of deals in China increased by ninefold to US$ 25.5 bn — almost as much as the US$26.7 bn from all fintech investments globally in 2017.
Listen to our February 2019 Fintech Monthly Podcast here.
Weekly Round-up (18 February – 24 February 2019)
Action continued in the international money transfer and fintech universe with Japan’s financial services regulator reportedly planning to deregulate non-bank overseas money transfers, Apple & Goldman Sachs teaming up for a credit card, Transferwise reportedly planning to sell a stake that would value the fintech at £3bn+, Chinese insurer Ping An starting fintech operations in Indonesia, EMQ receiving FSC approval to offer cross-border remittance services for migrant workers in Taiwan, digital payments major bill.com announcing to eliminate wire transfer fees for businesses and TerraPay collaborating with a local bank for instant remittances in Sri Lanka.
Japan Allows Fintech Payments Specialists to Compete with Banks
Japan is set to allow non-bank companies to handle money remittances of over ¥1 mn (US$ 9,000), lifting a limit that has prevented fintech start-ups from providing faster and cheaper services in an area dominated by the banking sector. The planed moved is aimed at promoting the market entry of fintech companies, thereby reducing remittance charges and speeding up international money transfers. Japan’s Financial Services Agency plans to grant money transfer licenses covering larger transactions to “suitable” non-banking firms that meet minimum capital requirements. Further announcements are expected, but it is estimated that the cap will be removed by mid-2021. The decision is likely to herald massive interest in fintech money transfer specialists, particularly among small and medium-sized Japanese businesses which have so far been unable to take advantage of the much cheaper transfers these firms provide due to the limitation on transaction size.
Apple, Goldman Sachs Team Up on Credit Card Paired With iPhone
Tech leader Apple and banking major Goldman Sachs plan to issue a joint credit card paired with new iPhone features that will help users manage their money. The card will be rolled out to employees for testing in the next few weeks and officially launch later this year, reported Wall Street Journal. The companies hope to attract cardholders by offering them extra features on Apple’s Wallet app, which will let them set spending goals, track their rewards and manage their balances. The card could help both companies broaden their revenue away from their traditional core products. Apple has been sharpening its focus on its services business, including mobile payments and music streaming. Goldman, for whom this is the first card product, is reportedly adding customer-support call centers around the country and building an internal system to handle payments.
TransferWise Share Sale to Value UK Fintech at £3bn
London fintech TransferWise is reportedly planning to sell a stake that would value the fintech at more than £3bn or approx. US$ 4 bn. The company has appointed Goldman Sachs to sell about US$ 200mn (£153mn) in new shares on behalf of existing investors, according to Sky News. The deal, if completed, will cement the company’s position as UK’s top tech start-ups, with an IPO likely to be on the medium-term agenda. TransferWise’s supposed $4bn valuation would be more than twice the level at which it last sold new shares about 18 months ago.
China’s Ping An Forays Into Indonesian Fintech Market
China’s largest insurer Ping An has announced its expansion into Indonesia’s fintech market with the launch of its subsidiary OneConnect in Southeast Asia’s largest market. OneConnect aims to enable local banks and financial institutions to accelerate their efforts in digitization of financial services and move towards a more inclusive financial industry. OneConnect is also known for its blockchain solution – it is the technology provider for Hong Kong Monetary Authority’s trade finance blockchain project Hong Kong eTrade Connect. Its collaboration with Asparindo in Indonesia is expected to see OneConnect conducting training workshops and performing site visits at the markets to help users.
EMQ Unveils Cross-Border Remittance Service for Taiwan’s Migrant Workers
EMQ, a cross-border settlement network in Asia, announced last week that the Financial Supervisory Commission (FSC) of Taiwan has approved its application to offer cross-border remittance services for migrant workers in Taiwan. As the first fintech startup to be accepted into the Taiwan’s Regulatory Sandbox, EMQ will within the FSC prescribed timeline, provide a more convenient and lower cost remittance services for migrant workers sending money home to Vietnam, Indonesia, and the Philippines. The money transfer can be done through smartphones. Among the payout options are instant cash pickup, deposit to partnered banks and mobile wallet, and home delivery of cash.
Bill.com Eliminates Wire Transfer Fees for International Payments
Bill.com, the digital business payments company, announced last week to eliminate wire transfer fees for businesses paying electronically in local currencies using its International Payments solution. For small & medium businesses and mid-market companies, Bill.com International Payments streamlines the business payments process, making cross-border payments easier. Unlike banks or other international payment providers, Bill.com offers control with automated approval workflows and time savings by syncing with leading accounting software. Bill.com International Payments solution enables the company to pay its contractors, who are located all over the world, in a timely manner.
TerraPay Takes Cross-Border Payments to Sri Lanka
Mobile payments switch TerraPay has partnered with Pan Asia Bank, which enables TerraPay’s partners to make cross-border money transfer to all bank accounts in Sri Lanka. With this, Sri Lankan migrants worldwide, through TerraPay’s partner outlets/website/mobile-app, can send money to their family back home, instantly by transferring it to their bank account. TerraPay is a real-time, low value payments network, which connects all financial instruments globally. TerraPay’s interoperability engine enables customers to send and receive real-time transactions across diverse payment instruments, platforms and regions. TerraPay enables more than 1.5 bn bank accounts and 200+ mn mobile money wallets in over 50 countries to receive real-time cross-border money transfers.
Listen to our January 2019 Fintech Monthly Podcast here.
Weekly Round-up (11 February – 17 February 2019)
The week of 11-17 February 2019 saw continued action in the international money transfers and fintech universe with top US bank JP Morgan announcing its own cryptocurrency and the Chinese fintech giant Ant Financial completing the takeover of money transfer firm WorldFirst. Among new funding updates, London-based digital payments fintech Rapyd raised US$ 40 million and the Philippines-focused money transfer fintech SendFriend raised US$1.7 million. Among other updates, UAE-based money transfer firm Finablr’s UAE Exchange and Unimoni went live on the RippleNet and Remittances to the Philippines reached all-time high in December 2018. Meanwhile, research from InstaReM concluded that the imminent Brexit has already created a dent in the remittances out of the United Kingdom.
Ant Financial Completes WorldFirst Takeover
Ant Financial Services Group, the world’s most valuable financial-technology startup, is acquiring the UK-based money-transfer company WorldFirst for more than £500 mn (around US$ 640 mn), marking a successful western deal for the firm which saw a US purchase blocked by regulators last year. Media reports first surfaced in December that Ant Financial was in talks to purchase WorldFirst. This isn’t an average multi-million dollar acquisition. Ant Financial ran into problems when its plan to purchase the remittance service provider MoneyGram was blocked by the US regulators on national security grounds.
JPMorgan Launches JPM Coin, World’s First Bank to Launch Cryptocurrency
JP Morgan became the first major US bank to introduce its own digital token for real-world use, the latest step in Wall Street’s evolving approach to the blockchain technology. The biggest US bank said it developed a prototype digital coin, to be called JPM Coin, that it plans to use to speed up payments between corporate customers. While some experts questioned the broader impact of a dollar-pegged coin available only to JP Morgan clients, others said the bank’s involvement lends legitimacy to cryptocurrencies. JPM Coin is considered to be a direct threat to one of the most visible blockchain companies, Ripple, and the digital currency used in its products. However, JPM Coin has some key differences to XRP. It’s “exclusively for institutional customers” and in will be based on a private, permissioned blockchain Quorum—a far cry from the public, blockchain used by bitcoin.
London Fintech Rapyd Raises £31.2 mn
Rapyd, a global fintech-as-a-service platform that enables businesses and consumers to pay or be paid however they choose, using any payment method or cash for local and cross-border e-commerce, announced a US$ 40 mn financing round last week. The Series B is co-led by Stripe, the payments giant that is now valued at US$22 bn, as well as General Catalyst, one of Stripe’s biggest backers. Founded in 2016, Rapyd describes itself as a mobile-first financial network that makes the world’s “favorite ways” to pay and be paid instantly available through a single API and SDK. With this investment, Rapyd will seek to expand its technology platform for in-country or cross-border commerce requiring local payments, such as bank transfers, e-wallets, or cash for local acceptance and payouts.
Remittance Startup SendFriend Secures US$1.7 mn Funding
SendFriend, the digital remittance service to send money to the Philippines, announced last week that it has raised US$1.7 mn to better enable the Overseas Filipino Workers to securely transfer USD to PHP at the lowest rate available. The funding comes from MIT Media Lab, Barclays, the Mastercard Foundation, Ripple, Techstars, Mahindra Finance, 2020 Ventures, and 8 Decimal Capital. The funds will be used to build out the team, focus on community engagement, and marketing efforts. In addition, SendFriend is leveraging xRapid to create a seamless money transfer experience that enables the remittance company to convert USD to XRP to PHP in a matter of seconds. At US$ 30 bn, Philippines’ remittance industry is the third largest globally, next to China (US$64 bn), and India ($72 bn).
UAE: Financial Company Finablr Joins Ripple
UAE-based Finablr, a Payments and Forex platform, announced last week that its network brands UAE Exchange and Unimoni are now on RippleNet. Finablr had partnered with one of the largest bank of Thailand, Siam Commercial Bank which is a Ripple partner to provide services on RippleNet. Now, it is planning to expand its services to other countries. With this, UAE Exchange and Unimoni become the first in their category in the Middle East to have adopted blockchain technology to process transactions. And Finablr is seeking to capitalize on just that. Finablr also acquired a digital payments firm TimesofMoney in order to capitalize on the e-commerce growth, in November 2018.
Philippine Remittances Hit New Record in December 2018
Cash remittances in December in 2018 grew 3.9% year-on-year, reaching an all-time high of US$2.8 bn, data from the Bangko Sentral ng Pilipinas released last week showed. Personal remittances reached USD32.2 bn in 2018, the highest annual level to date. “Cash remittances in 2018 remained strong amid political uncertainties across the globe. This is evident in Asia, the Americas and Europe, which grew annually by 12.3 percent, 9.7 percent, and 7.7 percent, respectively,” the Bangko Sentral said. The bulk of cash remittances for the year came from the US, Saudi Arabia, United Arab Emirates, Singapore, Japan, the United Kingdom, Qatar, Canada, Germany and Hong Kong. Cash remittances from these countries accounted for almost 79 percent of total cash remittances.
Brexit Dents UK Remittance Market
Research conducted by digital cross-border payment provider InstaReM, one of Singapore’s hottest fintechs in 2019, revealed that 44% of the UK migrants are now sending less money ‘home’ as a result of Brexit chaos and a drop in value of sterling. The survey found that nearly half (48%) of money that is sent home is for food and healthcare for their families. They simply don’t get as much for their pound as a result of the economic uncertainty in the UK. It revealed that 36% now sacrifice a greater proportion of their income to continue to provide the same level of support they did for their families before. InstaReM will help protect migrants against the implementation of Article 50 with its Brexit50 offer which gives users a transfer bonus of £50 when remitting money from the UK to families abroad.
Listen to our January 2019 Fintech Monthly Podcast here.
Weekly Round-up (04 February – 10 February 2019)
Action continued in the international remittances and fintech universe during the week of 4-10 February with Forbes releasing its much-awaited Fourth Annual Fintech 50 List, Visa upping its offer to buy Earthport in its ongoing battle with Mastercard, Western Union reporting its Q4 and FY 2018 results, Swedish Fintech Tink raising US$ 64 mn at a valuation of US$ 270 mn, Germany’s Raisin raising US$ 114 mn, resigning of Transferwise’ Head of Asia-Pacific expansion and Ripple announcing 11 new University partners for its Blockchain Research Initiative.
Forbes Releases Fourth Annual Fintech 50 List
The leading American business magazine Forbes released its much-awaited fourth annual Fintech 50, a list of 50 innovators who are changing how people save, spend and invest, last week. 19 of the 2019 Fintech 50 are valued at US$ 1 bn or more. 20 startups made their first appearance on this list. 12 of this year’s Fintech 50 companies are involved in payment technology, including the most valuable fintech, Stripe, which is worth US$22.5 bn. The notable crypto/blockchain-related fintech companies that made the list include Ripple, Coinbase, and Circle. The other 3, lesser-known, crypto-related fintech companies are Gemini, Bitfury, and Axoni. Among the notable ones who were left out this year include the company Blockchain, which was described as the world’s most popular cryptocurrency wallet by Forbes last year, private blockchains creator Chain, Crypto compliance provider Chainalysis, Crypto exchange ShapeShift, blockchain & smart contracts platform Symbiont, and the Bitcoin wallet Xapo.
Visa Ups offer for Earthport in Battle with Mastercard
Visa sweetened its offer for payment company Earthport to about £247 mn pounds (US$319.84 mn), pushing past rival Mastercard’s earlier bid and setting up a showdown for the assets. A unit of Visa offered 37 pence in cash for each Earthport share, a 23% premium to its initial bid and 12% higher than Mastercard’s offer last month. Having backed the earlier Mastercard bid, Earthport has done an abrupt about-turn to welcome Visa’s new valuation. Mastercard said it was considering its options and urged Earthport shareholders to take no action in response to Visa’s announcement last weel. Both Visa and Mastercard have cited the same reason for their interest in Earthport – the deal would allow it to expand its cross-border network service.
Western Union Reports Q4 & FY 2018 Results; Digs Deeper into Digital
Western Union reported financial results for Q4 2018, and FY2018 and provided its financial outlook for 2019 last week. The money transfer giant’s Q4 earnings met analyst expectations on adjusted earnings per share, but came in slightly below estimates on revenue. However, WU CEO Hikmet Ersek remained positive and forward-focused on the result. “We feel confident about our operations and business. In 2019, we will continue to execute our strategy to deliver strong digital expansion, offer our cross-border platform to new payments areas and generate additional operating efficiencies,” Ersek said.
Swedish Fintech Start-up Tink Raises US$ 64 mn at US$ 270 mn Valuation
Swedish fintech start-up Tink raised €56 mn (US$64 mn) in a funding round aimed at fueling its expansion plans. The funding exercise values Tink at approx. €240 mn (US$273 mn), CNBC reported last week. Founded in 2012, Tink stated its mission is to make banking “better” by creating technology to improve customer experience and bring more financial clarity. Tink reported that the investment is a sign of recognition that we’re building something that’s important. It gives Tink the firepower to become the leading European open banking platform.
Raisin Announces US$ 114 mn Funding Round
Berlin-based Raisin, the pan-European fintech marketplace for savings and investment products, announced last week that it has raised US$ 114 mn in Series D funding. Existing investors Index Ventures, PayPal, Ribbit Capital and Thrive Ventures all participated in the round. This takes the company’s total amount raised to €170 mn (US$195 mn), and follows its €30 mn (US$34 mn) series C round in early 2017 and an undisclosed strategic investment from PayPal in December same year. The new capital will be used for the global expansion. Raisin also announced that it has brokered a total of €10 bn in deposits to 62 partner banks, earning savers €79 mn in interest since it was founded in 2013.
TransferWise’s Head of Asia-Pacific Expansion Leaves
Lukas May, Transferwise’ Head of International Expansion in Asia-Pacific, has resigned, according to the Business Times. He will return to London to work on UK-Asia trade negotiations with the UK government. May joined Transferwise in 2017, relocating to Singapore, the firm’s Asia-Pacific headquarters, to lead the fintech’s efforts to expand into new markets in the region, as well as establish relationships with banks and regulators. Under Lukas, TransferWise set up its presence in Singapore not just as another market to expand into, but also to serve as TransferWise’s Asia Pacific hub.
11 More Universities Join Ripple’s $50 Mn Blockchain Research Program
Ripple announced the latest group of partners that have joined its University Blockchain Research Initiative (UBRI) last week. Since its launch, UBRI has helped foster increasing levels of interest and academic activity by leading faculty, post-doctoral and graduate students at many of the world’s top universities. The program, first announced last June, provides funds for research and curriculum development related to blockchain. Ripple is helping lead development for blockchain-focused academia and research. Among the universities that recently joined the initiative were Carnegie Mellon, Cornell, Duke, and University of Michigan in the U.S.; the National University of Singapore, the Institute for Fintech Research at Tsinghua University in China, and the University of São Paulo in Brazil.
Listen to our January 2019 Fintech Monthly Podcast here.