FinTech Update, 1/13 - 1/19
Jan. 13-19, 2020
Leading Off
Former CFTC Chairman Chris Giancarlo launched the Digital Dollar Foundation to help create a U.S. government-backed digital currency; Visa announced that it will acquire Plaid for $5.3B; Revolut is reportedly nearing a new funding round at a $5B valuation; and Ant Financial announced it will host a “massive” fintech conference in Shanghai in April; and the American Banker explores the implications of the Visa-Plaid deal.
In the News
Former CFTC officials form CBDC organization. Former Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo and former LabCFTC Director Daniel Gorfine teamed up with Accenture to create the Digital Dollar Foundation, a non-profit aimed at creating a central bank digital currency (CBDC) in the U.S. “A digital dollar would help future-proof the greenback,” said Giancarlo.
Visa to acquire Plaid for $5.3B. The global payments giant will purchase the financial data sharing firm for $5.3 billion as it works to increase its access to customers’ non-card spending data. Visa’s Chief Executive Al Kelly said that the acquisition will “help expand the company’s access to financial technology firms while accelerating its movement outside of cards.”
Visa invests in data security startup Very Good Security. The global payments firm continued its spending spree, investing an undisclosed sum in Very Good Security (VGS), a provider of data security and compliance services to fintechs. VGS stores and handles high-risk data on behalf of clients to allow them to focus on core services. The company was a launch partner for Visa's Fintech Fast Track program.
Revolut to raise new round at $5B valuation. The London-based challenger bank, which has rapidly expanded its global footprint in the past 18 months, has reportedly been valued at $5 billion ahead of a new funding round. Technology Crossover Ventures, an early backer of Spotify, Airbnb, and Netflix, is expected to lead the new round, which is expected to close by the end of January.
Ant Financial to host fintech conference. The Chinese fintech giant is organizing a “massive” fintech conference to be held in Shanghai in April. The Inclusion Fintech Conference is expected to include “30,000 participants for the three-day [event],” with speeches and panel discussions covering topics like “the global digital economy, digital finance, innovative technology, . . . cities, and sustainability."
What does the Visa-Plaid deal mean for banking? Writing in the American Banker, Penny Crosman explores the mega-acquisition and its implications for banks and fintech firms. Crosman highlights that Plaid’s “connections with 11,000 financial institutions” could reduce current frictions among banks regarding data-sharing and “accelerate open banking initiatives and lead a democratization of finance.”
EBA releases report on big data and advanced analytics. The European Banking Authority (EBA) report explores trends and recommends key safeguards for technological neutrality in regulation of big data and advanced analytics use in finance. The report advocates focusing on data management, infrastructure, governance, and methodology, alongside addressing elements of trust including ethics.
Amazon envisions paying with a wave. The tech giant is developing checkout terminals that will allow customers to link card information to their hands, and enable them to pay for purchases with their palms. Integrating itself further into consumers’ financial lives, Amazon hopes to leapfrog competitors’ mobile wallets (like Apple Pay) while expanding its already-extensive access to consumer data.
Raisin chooses Choice. The Berlin-based deposit and savings marketplace will acquire Choice Financial Solutions, a New York-based provider of deposit and investment software and solutions, ahead of its expansion into the U.S. market. Raisin plans to “license Choice FS's software to American banks and credit unions” and also offer them “via the Raisin US platform, which will launch soon.”
Equifax settles for $1.38B. A judge has given final approval to settle a class action lawsuit related to the credit agency’s 2017 data breach, which compromised the personal information of around 145M Americans. The agreement mirrors the one between Equifax and the FTC last year in giving victims the choice of free credit monitoring or a payment. Around $1B of the settlement is dedicated to making security upgrades.
Have a great week!
The Fintech Update Team