We finish up the week looking at the most interesting fintech headlines from the past seven days. We discuss the first fintech unit of Booking.com, Google’s push into Japan’s fintech market, Binance trouble, Fly Now Pay Later launching their services across the US, an online finance company warning its users against crypto, Circle going public, and a leak that shows Instagram may soon implement NFT features on its app. We also look at several new partnerships in fintech, including the one between Swedbank and ACI that resulted in a 55% decrease in card fraud. There was also an interesting development in the AI Fintech world and a partnership between Pundi X and OVO that will help to facilitate crypto in Turkey, all according to the newest regulations.
One of the American big tech giants, Google, is planning to push into Japan’s fintech market. The company is in the process of acquiring the Tokyo-based payment provider Pring in a deal that could allow Google to offer financial services in Japan on its own instead of depending on partner institutions. Google is allegedly looking at a $180-$270 million investment for all the shares in Pring.
Pring is owned by the Japanese Mizuho Bank and several investors. It currently providers it customers with cash transfers, payments, and smartphone withdrawals. In addition, fintech has roughly 400 corporate customers who use its services to make small payments.
Japan’s cashless payment sector is still relatively small as compared to the Western countries, with a share of cashless payment in retail transactions not even reaching 30% in 2020. The adoption is much slower than in the neighboring countries as well, with both China and South Korea averaging 70-90% of cashless payments.
This week, Booking.com announced it would launch a new FinTech business unit that aims at facilitating access to the global travel marketplace for the partners and clients both. The company wants to enhance the travel-related shopping experience. The brand new unit will be led by the Senior Vice President, Daniel Marovitz. Morovitz has been in charge of Booking’s payments products strategy for the past four years and he holds over 20 years of executive experience in banking, social media, and e-commerce.
With a cross-functional team that will be based in Amsterdam and Shanghai, Booking.com wants to grow the unit to over 400 FinTech experts by the end of this year and create new products that can strengthen the company’s position.
“What sets us apart from some of the other major players in the e-commerce space, who essentially operate a collection of domestic business verticals around the world, is the truly international scope and scale of our business,’ says Daniel Marovitz, Senior Vice President of FinTech at Booking.com. “Our Japanese accommodation partners regularly host guests from France, and vice versa. The combination of cross-border and cross-currency transactions is a pain point for the marketplace and therefore an opportunity for us. Markets have vastly different payment practices and methods and bridging the gap between these, helps ease friction and enhances the value we bring as a global intermediary. Travel is different from nearly every other corner of e-commerce, strictly because of the often massive time gap between financial commitment from a customer booking and the time they actually take their trip. Many people book and pay for their travel up to a year in advance, which creates cash flow friction for travelers and providers alike. We will work to find creative solutions to help our marketplace work more efficiently, flexibly, and securely for all participants.”
Binance drama continues and we are set to see more stories like this in the upcoming weeks. This week, Barclays has suspended debit and credit card payments from their UK customers to Binance. The move comes after the Financial Conduct Authority (FCA) in the United Kingdom started actions against the crypto exchange and banned it from any regulated activity.
On Monday, Barclays sent a text message to all customers who previously made payments to Binance stating: “As you’ve made a payment to Binance this year, we wanted to let you know that we’re stopping payments made by credit/debit card to them until further notice. This is to help keep your money safe.”
Barclays highlighted its customers can still withdraw their funds from Binance.
ACI Worldwide, a provider of payments software solutions that has collaborated with the Nordic bank Swedbank just announced the partnership resulted in 55% decrease in card fraud. The Swedish bank decided to partner with ACI to enhance its fraud platform and upgrade its fraud management approach that is now based on insights from ML and shared data.
“Utilizing ACI Fraud Management has allowed us to move from single transaction monitoring to customer behavior monitoring, a strategy that helps us to quickly identify low-risk transactions and exempt them from SCA’s two-factor authentication requirements,” said Tonu Ots, Head of Card Issuing, Swedbank. “This has led to a considerable decrease in card fraud and helped to enhance the customer experience, which is crucial to business growth in light of average high checkout abandonment rates.”
“Swedbank has demonstrated that it is possible to turn the SCA challenge into an opportunity,” said Jay Floyd, Senior Principal Financial Crime Consultant, ACI Worldwide. “In addition to delivering an innovative fraud management solution that maintains compliance, manages exemptions, and enhances the customer experience, the bank has created a true market differentiator for themselves and their clients by deploying the latest ACI technology.”
The AI Fintech Previse that specialized in instant payments partnered with the global e-invoicing startup Pagero. The collaboration aimed at providing instant, embedded finance to be delivered through the largest open business network in the world. Thanks to the partnership, Pagero will roll out Previse’s early payment capabilities. Previse leverages AI on its InstantPay platform that assesses whether invoices will be paid. Then, the startup unlocks bank capital to pay suppliers in a matter of seconds. Pagero comes in with their offer of digitizing document flow between buyers and suppliers. Hence, it gives InstantPay a ready set of data points.
Steve Dempsey, Sales Director at Previse, said: “It is time to bring embedded finance technology into the B2B space and give suppliers control over how they get paid. Pagero is an industry leader in end-to-end supply chain management and its P2P platform is second to none. We are excited to work with Pagero to embed the next generation of early payment solutions into its platform.”
Matt Hammond, Managing Director, Western Europe at Pagero, said:“Previse’s embedded finance solution is unique, and we are excited to bring this technology to our customers. We look forward to collaborating with Previse to offer truly flexible supply chain management for all of our suppliers.”
The British fintech Fly Now Pay Later has just signed a deal with the US-based financial services organization and BaaS provider, Cross River Bank. The British startup will use Cross River’s FDIC License to offer its services to US clients. Thus, US consumers will now be able to split their payment for travel into installments. The collaboration comes at a perfect time, as thousands of people are ready to begin a long-awaited vacation after over a year of recurring lockdowns.
“There are tens of thousands of people who have families around the world who need a frictionless way to finance their flights,” said Jasper Dykes, CEO of Fly Now Pay Later.
“By removing financial boundaries, we hope to open the post-covid-19 world for travelers and reconnect people with their friends and families around the globe.
“As a trusted financial services organization, Cross River’s expertise and innovation, together with Fly Now Pay Later’s flexibility and affordability, will allow customers an entirely streamlined and stress-free solution when financing travel. Further to our successful pilot program in the US, we are already seeing a very strong demand from consumers who are presently utilising Fly Now Pay Later primarily to spread the cost of their domestic flight and hotel purchases. Further regions of focus for Fly Now Pay Later will include France, Italy, Spain, and of course further expansion to our existing German segment. We look forward to supporting our travel partners as closely as possible as the travel industry emerges from the global covid-19 pandemic,” he adds.
Founded by Jasper Dykes in 2015, Fly Now Pay Later has just secured $14 million in its Series A investment round, and the total funding is estimated at $62 million. Currently, the company operates in the UK, US, and Germany and plans to make more than $1 billion in enterprise value within the next 1,5 years. Fly Now Pay Later can be used not only for booking flights but also for hotels, car hire, package holidays, and more.
The online finance startup SoFi is issuing a warning to its crypto customers before every transaction they make on the platform. The CEO of SoFI, Anthony Noto, told CNBC on Thursday: “We take a very structured and serious approach to consumer protection. We ensure that consumers are educated. We focus on suitability,” Noto said on “Squawk Box.” “Every time someone enters a buy action, we have a warning that says it’s an unproven asset, it’s highly volatile, and you could lose all of your money.”
SoFi is a free trading platform founded back in 2011. In June, the company went public following a SPAC merger. Note said SoFi is focusing on giving its customers awareness of payments. Customers are “getting the bulk of the vast majority of that price improvement from payment for order flow,” Noto said. “It’s a widely used piece of the financial models that allow for fractional shares, that allows for paying no commissions. But it needs to be adequately disclosed. It’s a very, very small percentage of our revenue.”
A new leak by the famous mobile developer and leaker Alessandro Paluzzi disclosed that Instagram is looking at allowing its users sell NFTs on the platform. According to Paluzzi, both Instagram and Twitter are working on adopting their own version of non-fungible tokens (NFTs) soon. Paluzzi’s research shows that Instagram posts that will offer NFTs will be labeled as “Collectible” and alert users of the option to purchase an NFT.
The decision to implement NFT features is not surprising as the NFT market has been flourishing this year, with sales surpassing $2.5 billion in 2021 as compared to $13.7 million in the same period of 2020.
The global fintech startup Circle announced it is going public through a business combination with Concord Acquisition Corp. The transaction values Circle at $4.5 billion and the existing shareholders will keep roughly 86% ownership of the company. The co-founder of Circle, Jeremy Allaire, will remain the CEO of the company and Bob Diamond, Chairman of Concord Acquisition Corp and CEO of Atlas Merchant Capital, will be the new board member. The transaction is set to close at the end of this year.
Bob Diamond, Chairman of Concord Acquisition Corp and CEO of Atlas Merchant Capital, noted “Circle is the true pioneer of trusted digital currencies, an increasingly critical part of the global financial system. The firm has earned its exceptionally strong reputation building highly innovative blockchain-enabled products and services within the regulatory perimeter. Circle’s world-class leadership team, its track record of delivery, and extraordinary ambition help position the firm as one of the most exciting companies in the transformation of finance.”
Jeremy Allaire, Circle’s co-founder, and CEO commented “Circle was founded with a mission to transform the global economic system through the power of digital currencies and the open internet. We’ve made huge strides towards realizing this vision, and through this strategic transaction and ultimate public debut, we are taking an even bigger step forward, with the capital and relationships needed to build a global-scale internet financial services company that can help businesses everywhere to connect into a more open, inclusive and effective global economic system. We are thrilled to partner with Concord’s executive and investment team, drawing on their decades of operating experience growing financial services businesses around the world.”
The blockchain solution developer Pundi X announced its partnership with a platform as a solution company OVO Dijital Servisler. The collaboration aims at distributing Pundi X’s products to Turkish consumers by Ovo. It will focus on business owners that want to facilitate in-store cryptocurrency exchange.
Hakan Akyüz, the General Manager of OVO, emphasized the deal is in compliance with all the regulations set by the Turkish government. “Pundi X platform is fully compliant to the new crypto asset regulation announced by the Central Bank of Republic of Turkey on Apr 16, 2021,” he said. “There is [even] no need for large sums for this as there is no sub-transaction limit on the platform. In other words, consumers who are interested in cryptocurrencies will be able to visit any Pundi X point and perform crypto transactions even in small amounts like 5 Turkish lire.”
OVO is a very experienced player in enabling mobile payments in Turkey, distributing products such as oWallet. The business owners interested in the Pundi X offerings will be able to select from a variety of starter packs that include all infrastructure and marketing materials. Pundi X products will be initially available across 81 Turkish cities.