Fintech Wrap Up

In this edition of Fintech Wrap Up, we're exploring the rise of digital-only SME lenders, the booming mobile money market in West Africa, and the transformative impact of Brazil's PIX real-time payment system. 🔥 First up, digital-only SME lenders are redefining the banking landscape. Unlike retail-focused peers, these lenders prioritize lending volumes and deposits over sheer customer numbers. Allica Bank, founded in 2018, achieved a revenue of nearly £191 million in 2023 with a net profit of £16 million, marking its first profitable year. Similarly, Redwood Bank, established in 2017, reached profitability within four years, posting a profit of £5.5 million in 2023. OakNorth, known for its data-driven approach, announced a pre-tax profit of £187.3 million in 2023, showcasing a 23% increase from the previous year. 🔥 Shifting gears to West Africa, mobile money is making waves as the region becomes a global leader in mobile financial services. Over a third of new registered and active 30-day accounts globally in 2023 came from West Africa. The West African Economic and Monetary Union (WAEMU) saw more than 110 million new mobile money accounts opened between 2018 and 2022, boosting financial inclusion from 56% in 2018 to 71% in 2022. 🔥 In Brazil, PIX has revolutionized real-time payments in just three years, becoming the world's second-largest real-time payments market after India. Launched in November 2020, PIX now supports over 150 million active users and expedited over 37 billion transactions in 2023. Brazil's mobile-first consumers have embraced PIX for its no-fee, instant transactions, which now represent more than 36% of the country’s electronic payments. 🔥 Exploring payment stack architecture, banks face challenges with evolving payment rails and customer expectations. The optimal approach involves modernizing payment orchestration systems to manage complexities effectively. A payment hub, positioned between the core system and gateway connectors, can centralize and streamline payment processes, ensuring agility and control over payment capabilities. 🔥 For those curious about the technicalities of QR code payments, the process involves quick interactions between the merchant's point-of-sale system and the PSP, enabling swift and secure transactions 🔥 Lastly, in Kazakhstan, the fintech market is booming, with online banking users increasing 4.6 times between 2019 and 2023 due to technological advancements and supportive regulations 🔥 In curated news, NALA's $40M funding aims to enhance payment reliability in Africa, Alipay's new Tap! feature simplifies in-store payments, and HSBC's Zing app promises seamless international transactions with its smart multi-currency capabilities 👉 Read the full version here https://shorturl.at/vH2CH #fintech #payments #openbanking

The world's top 250 fintech companies: 2024 In this climate, CNBC, together with market research firm Statista, has listed the top 250 fintech companies globally. The World’s Top Fintech Companies 2024 report includes companies both big and small, across a variety of different market categories. Each segment table is unranked, and the companies are listed in alphabetical order. This year, CNBC also handpicked standout companies from each individual market segment for their newsworthiness. These CNBC “editor’s picks” are selected from the overall list, and the companies chosen hold no higher prominence than others in Statista’s objective, KPI-based analysis. Despite struggles facing the sector, innovation is continuing to happen — with artificial intelligence a key theme this year. Fueled by technological advancements, expanding global markets, and collaborative leadership, companies are shaping the future of financial services. #fintech #payments https://lnkd.in/gS3UiqcW

Uzbekistan mobile bank TBC UZ raises $38.2M to expand its financial products Uzbekistan’s only mobile-exclusive bank, TBC Bank Uzbekistan, owned by London Stock Exchange-listed TBC Bank Group, has raised $38.2 million in a fresh equity investment. It plans to expand its local presence in the country and introduce new financial products, as well. TBC Bank Group has led the latest funding in TBC Bank Uzbekistan by infusing $23 million, while shareholders European Bank for Reconstruction and Development (EBRD) and World Bank’s International Financial Corporation (IFC) have participated in the round by investing $7.6 million each. After serving customers in Georgia, TBC Bank Group decided to expand outside that country’s borders in 2019 and found Uzbekistan as its first international market. The bank started its Uzbekistan operations in 2020 through a separate entity, TBC Group Uzbekistan, which launched the mobile-only bank after its debut, with no physical branches in the country. The plan was to leverage Uzbekistan’s increasing digitization effort and foresee business growth in the country, which has the biggest population after Russia and Ukraine in the region — the second-largest among all the Commonwealth of Independent States countries — and has upright economic and socio-demographics. “Before TBC came in, there were no banking apps in Uzbekistan … Fast forward four years, most of the banks have got a mobile app, but TBC is far ahead of the field,” said Oliver Hughes, head of international business at TBC Group, in an exclusive interview. According to official data, Uzbekistan has a 70% smartphone penetration rate and 77% internet penetration rate; 59% of its population of 37 million is under 30 years old, making it a viable market for a mobile-specific business. TBC Bank Uzbekistan offers a mobile app through which customers can open bank accounts and access services including cash loans and deposits. This omits the requirement of physically going to a bank branch to access banking. Hughes told TechCrunch that a couple of years ago, customers in Uzbekistan typically had to visit their bank and stand in a queue to get any of their banking work done. Alongside the mobile-only bank, TBC Group Uzbekistan owns Payme, the digital payments app for individual users and small businesses, as well as the Sharia-compliant credit business, called Payme Nasiya. To broaden its coverage, it looks to integrate some experiences from these two businesses within the bank or sync them with the bank’s operations. For instance, through its app, TBC Group Uzbekistan will offer tips, recommendations and user-generated content on local events, entertainment, concerts and travel to provide complementary services that are not strictly financially related. Some of these features will first arrive on the Payme app but will be available to the TBC Bank Uzbekistan customers over time. Source Techcrunch #fintech #banking #banking

The Rise of Spend Management Fintechs in the EU and UK Let’s explore the EU and UK spend management market, players, and their innovative products like integrated corporate cards, automated bookkeeping, and real-time financial analysis tools. As a fintech product manager and enthusiast who writes a newsletter, I constantly monitor developments in fintech, payments, banking, and related markets. Recently, my attention has been drawn to the spend or expense management landscape, especially after witnessing significant funding rounds by companies such as Payhawk, Ageras, Qonto, and Pleo. These European companies have grown substantially in recent years and show tremendous potential for further expansion. On a personal note, I always considered spend management a part of business banking until I realized it was a distinct field. This revelation occurred when I submitted a reimbursement form via a spreadsheet and emailed my receipt to the finance team. A brief conversation with them revealed that they were using basic tools like spreadsheets, company chats/emails, and accounting software. They mentioned they were exploring the market to find solutions for better expense management. This experience, combined with the recent funding news, inspired me to delve deeper into the expense management landscape. 👉 Read the article here https://lnkd.in/dmFdcgKJ #fintech #spendmanagement #payments #expensemanagement

Visa, Mastercard to extend non-EU card fee caps to 2029, EU says Visa and Mastercard will extend caps on tourist card fees agreed five years ago with EU antitrust regulators by another five years to 2029, the European Commission said on Friday. Visa, the world's largest payments network operator, and its closest rival Mastercard, in 2019 agreed to a 0.2% fee cap on non-EU debit card payments carried out in shops and a 0.3% fee limit on credit card payments to settle an EU antitrust investigation and avoid hefty fines. The fee caps are due to end in November this year. The move followed a long-running investigation by the EU competition enforcer triggered by a 1997 complaint by business lobby EuroCommerce. The Commission, which acts as the EU antitrust watchdog, said the two companies volunteered to continue the fee caps beyond 2024. "Inter-regional interchange fees for debit and credit card transactions under these schemes will remain capped for another 5 years until November 2029," it said in a statement. "For card present (offline) transactions, the fees will remain capped at 0.2% for debit cards and 0.3% for credit cards. For card not present (online) transactions, the caps will remain 1.15% for debit cards and 1.5% for credit cards," it said. Visa said the extended fee caps provide market certainty on inter-regional interchange rates. "The Commitments agreed with the EC in 2019, and this new Undertaking, recognise that cross border, e-commerce transactions are fundamentally different to in-store payments," the company said in an email. Visa and Mastercard set and charge interchange fees, also known as swipe fees, to merchants which accept their debit and credit cards. The charges generate profits for bank and other card issuers. The EU enforcer however warned that it would start an investigation if it finds concrete evidence showing that the current caps would not be appropriate anymore. Source Reuters #fintech #payments #cards

Gen Z fintech Cleo more than doubles revenue Revenues at London-based Cleo more than doubled in 2023 as the Gen Z-focused financial health startup reduced costs and grew subscribers. Cleo reported a turnover of $65.9m in 2023, its latest accounts show, marking a 121% year-over-year increase. Cleo said it reached an adjusted break-even by December 2023, citing a “higher conversion and utilisation” of its paying products and “improved subscriber retention”. The British firm reduced net losses by 31% over the same period to $17m. Founded in 2016 by Barney Hussey-Yeo, Cleo has created an AI chatbot that is used by millions of young people to help them avoid overdrafts, build credit, and budget better. The majority of Cleo’s users are located in the US. In 2022, the financial assistance app raised $80m at a $500m valuation. Seb Johnson, founder of startup financials platform Growth Hub, said that Cleo’s latest results “confirm its future unicorn status”. "Shifting to profitability whilst still managing to double our growth each year has been the largest and most substantial challenge we’ve overcome," Hussey-Yeo said in a previous interview. The company's focus on the US market - a notoriously difficult market to break into - has been paying off. It derives most of its revenue from the US. In total, it has more than seven million users, as of October 2023. Cleo has raised $138m from investors since its launch, according to Dealroom data. Investors include Sofina, a listed tech investor who has backed companies such as Typeform, and Balderton Capital. Source UK Tech News #fintech #payments #cleo

Mollie adds Riverty's BNPL payment method Netherlands-based financial service provider Mollie has partnered with BNPL company Riverty to add a flexible payment method for its customers. With Riverty, Mollie customers now have an additional option to pay afterwards, with a payment period of up to 30 days. The payment method helps to optimise onversion and further simplify the payment process. Riverty is available from today for Mollie customers in the Netherlands, Belgium, Germany, and Austria. Seamlessly integrated into Mollie Dashboard Thanks to this partnership, Mollie is once again expanding its range of BNPL payment methods. In total, Mollie now offers more than 30 different payment methods. Riverty's solution is seamlessly integrated with Mollie, allowing customers to activate it in their Mollie Dashboard with just a few clicks. Powering merchant growth Riverty offers increased financial security and credibility and prides itself with its merchant brand comes first approach. Its end-to-end BNPL service handles every aspect of the payment process—from payment selection to invoice acquisition to payment reminders and potential debt collection. The company offers extensive branding configurability at multiple consumer touchpoints, ensuring the merchant's brand remains front and centre. This unique approach enhances consumer loyalty and helps build a stronger, more recognisable brand presence. Executives from Mollie said Riverty is a recognised BNPL solution, and the company focuses particularly on the European market. At Mollie, they have the same focus, making their ambitions a good match. In 2023, they made great strides to further align their product offering with their customers' needs, with the launches of Mollie Terminal and Mollie Invoicing also being examples of this. By now adding Riverty as a payment method, ecommerce companies can offer their customers even more freedom in the payment process. In a reply, officials from Riverty said that joining forces with Mollie strengthens their commitment to helping their merchants to stay true to their brands while converting and retaining customers. They’re happy to be partnering with an ambitious and service minded fintech player such as Mollie to make this happen. Source The Paypers #fintech #payments #bnpl

Hey Fintech Enthusiasts 🔥, in this edition of Fintech Wrap Up, we’re diving into the latest trends in fintech mergers and acquisitions, the transformative potential of asset tokenization, and the booming embedded finance market. 🔥 Have you noticed all the buzz around fintech M&A lately? We’ve got the scoop on why, despite an average of $3.5 trillion in global acquisition activity per year over the last decade, a whopping 90% of these deals fail due to poor implementation. Fun fact: bank-fintech acquisitions make up less than 1% of all fintech transactions. Among the top 50 U.S. and top 15 international banks, only 94 out of 500 acquisitions since 2013 were fintechs, with payments and lending tech firms leading the charge. Most deals are small, like under $300 million, making them easier to integrate. 🔥 Switching gears, let’s talk about asset tokenization. This process, from deal structuring to secondary market trading, is pretty cool. It involves creating a digital twin of a physical asset on the blockchain, boosting liquidity and simplifying ownership records. Imagine owning a piece of real estate as a token! 🔥 Now, onto B2B payment processing. These transactions are between businesses and often involve big sums and long payment terms. The shift to electronic invoicing is speeding things up, and security measures like encryption are crucial for protecting data. Compliance with regulations like AML and KYC is also a big deal to avoid legal headaches. 🔥 Generative AI is making waves in accounting too. It’s automating data collection, enhancing research accuracy, and helping accountants provide ongoing financial advice. This means more time for accountants to focus on value-added services. 🔥 Ever wondered how card payments work? The four-party model, involving the merchant, cardholder, issuer bank, and acquirer bank, is key. Marqeta is shaking things up with innovative transaction authorizations and API integrations that make the process smoother and more efficient. 🔥 Embedded finance is another hot topic. This market is projected to hit $320 billion in revenue by 2030. It’s all about integrating financial services into everyday interactions, making transactions seamless. Stripe and Adyen have already crossed the trillion-dollar mark in payment volumes, and the growth in embedded lending and insurance is impressive too. 🔥 In our curated news, Goldman Sachs is rolling out a generative AI tool for code generation, Point72 Ventures is making some big changes to its fintech team, and Rainforest has raised $20M to challenge Stripe with embedded payments for SaaS providers. Stay tuned for more insights and updates!

Mambu announces appointment of Mark Geneste as Chief Revenue Officer Geneste’s appointment is expected to drive growth and strengthen Mambu's position in the market, further enhancing its reputation as a leader in the banking technology sector. Mark Geneste brings extensive experience in sales leadership in the software industry, having held senior positions at Wolters Kluwer - Enablon, FactSet, Kempen Capital Management, Dun & Bradstreet, and Thomson Reuters. Prior to joining Mambu, Geneste was the Chief Commercial Officer at Backbase, an engagement banking platform. Throughout his career, Geneste has built up broad knowledge in banking, digital transformation and customer experience. His expertise in leading global sales and partner management teams makes Geneste well-equipped to guide Mambu as it enables more financial institutions around the globe to deliver seamless experiences for their customers. Fernando Zandona, Chief Executive Officer at Mambu: “I look forward to welcoming Mark on board, knowing he will greatly contribute to our mission at Mambu to make banking work better for everyone. Mark understands the imperative of bringing financial services technology into the digital-first world, where legacy technology is currently hindering progress. His appointment as CRO will help us deliver more for our customers, prospects and partners as we continue expanding our products and services to different markets and segments." Mark Geneste, Chief Revenue Officer at Mambu: “Throughout my career, I've seen firsthand how technology can revolutionise industries, especially in banking and financial services where taking the traditional route can be the biggest risk." Source Mambu #fintech #banking #corebanking

The Future of Fast Payments Innovations in payments have multiplied at a gravity-defying pace. FPS across the globe have been implemented to fill the gaps in the payment industry and continue to evolve and adapt to changing market dynamics. In fact, safe and efficient fast payment services are no longer just an option but a necessity, given the observed large demand from consumers and businesses. While initially most FPS were launched to support realtime and around-the-clock domestic P2P fund transfers, use cases have expanded drastically in recent years. This is explained mostly by technological progress, changing expectations, and the increased adoption of fast payments by a growing number and diversity of end users. The COVID-19 pandemic was also an accelerator of these transformations. Increased standardization in payment messaging across global markets is enabling interoperability and gradually permitting users (both businesses and consumers) to transfer funds across borders in close to real time. The interoperability between payment providers both domestically and across different jurisdictions is expected to grow multifold in the coming years. Retail payment trends such as digital lending and deferred payments present an opportunity to payment schemes, financial institutions, and overlay services to monetize and increase their customer base by offering services above and beyond the reach of traditional payment channels. Banks have been investing heavily in the development of open banking for sharing and leveraging customer-permissioned data with third-party developers and firms to build applications to provide more efficient and transparent services and options in banking. On the other hand, innovations such as digital currencies have caught the eye of both central banks, which are researching its probable usage as a fiat currency that can be transferred cheaply and quickly, and private-sector players. FPS operators, regulators, and participants need to track these digital innovations closely and leverage them to enhance customer experience together with the overall safety and efficiency of the system. Indeed, a good understanding of the key trends transforming the payment market and financial industry more broadly is critical for the planning of an ongoing FPS-development strategy, including for enabling its extensibility and scalability and continued improvements in service for all stakeholders, including end users. Source World Bank #fintech #payments #fasterpayments