Fintech Update, 11/16 - 11/22
Hi! It’s Monday November 23, 2020.
Quick heads-up that we will be off next week, likely still asleep in a turkey and stuffing-induced food coma. We hope you and your loved ones have a happy, safe, and filling Thanksgiving, and we’ll see you again in December! Best, Team TFU
Leading Off
Google unveiled major changes to its Google Pay app and announced plans to launch a mobile-first bank account called Plex in 2021. // Affirm substantiated rumors that had been flying for several months, filing paperwork with the SEC to go public via IPO. // In other news, the DOJ approved Mastercard’s planned acquisition of Finicity; Affirm partnered with Adyen on point-of-sale purchases; CVS embraced QR codes as a means of payment; and Spanish bank Santander bought Wirecard’s remaining assets. // Also: ICYMI, check out the Big Idea we published last week on CBDCs! // All this + more below!
Heavy Hitters
Google makes moves to be a big(ger) piece of your wallet. The tech giant completely revamped Google Pay, rolling out new features and a reorganized interface, bringing familiar features from other fintech apps into Google’s own app: Pay now “includes peer-to-peer payments as well as your transaction history . . . deals and discounts . . . [and the ability] to connect your bank accounts to get a searchable overview of your finances.” Even more significantly, Google is partnering with 11 banks to launch “Plex,” a mobile-first bank account that will debut in 2021. Between the new Google Pay and even newer Plex, the upshot is clear: Google is consolidating and directly competing with a “wide array of other apps and services” like Apple Pay, PayPal, Square Cash, Truebill, and online bank platforms. As we’ve previously written, BigTech’s growing incursions into consumer financial services aren’t surprising, but Google’s announcements provide particularly notable and wide-ranging evidence of the trend. They also serve as a reminder that, “when Google rolls out Google Pay or Apple offers a credit card with appealing features, it’s not out of altruism; it’s because those offerings are tools they can use to gather more data about you, and data is valuable.”
Affirm files to go public. The buy now pay later firm filed an S-1 with the Securities and Exchange Commission (SEC), announcing its plans to go public. Rumors about a forthcoming IPO for the firm have swirled throughout 2020, and Affirm likely is choosing to move now in response to favorable tech and fintech debuts this year (e.g., Lemonade and nCino traded 138% and 195% above their initial pricing). Digging in a bit, Affirm’s S-1 shows a 93% increase in revenue in FY2020 compared to FY2019, decreasing losses, and a profit of $34.8 million in Q2 of this year. The company has benefited from changes in consumer buying habits as a result of COVID-19, which has produced more online purchases and digital payments as well as more spending on larger items for home offices and home gyms. Notably, Affirm’s top merchant partner in 2020 is Peloton, which represented about 28% of its total revenue this year.
Quick Takes
DOJ approves Mastercard-Finicity tie-up. The Department of Justice completed its review of the proposed acquisition, which it had considered challenging on antitrust grounds, and approved the two firms to move forward together. The news is particularly significant on the back of the DOJ’s announcement two weeks ago that it would challenge Visa’s intended acquisition of Plaid.
Affirm partners with Adyen. In addition to filing for an IPO, Affirm struck a deal with Dutch payments company Adyen to allow merchants on the Adyen platform to offer Affirm as a checkout payment option. The partnership should be a win for both sides: Adyen has a significant share of Europe’s PoS market, and Affirm reports that its merchants see “85% higher average order values” compared to other payment methods.
CVS will offer support for PayPal QR codes. The pharmacy chain is the first U.S. national retailer to integrate PayPal’s QR code technology at the point-of-sale. The new checkout option, which is touchless and fee-free, will be available via PayPal or Venmo at over 8,200 locations across the country.
Uber partners with Marqeta. After de-prioritizing several of its finance-related partnerships in June, Uber announced a strategic, global partnership with the card issuer. Marqeta will serve as a global card issuing partner for Uber, providing them with critical financial infrastructure.
Goodnight, sweet prince: Santander buys remaining Wirecard assets. The Spanish bank purchased the disgraced German payments firm’s remaining technology assets, officially concluding Wirecard’s dissolution. Once the deal is complete, regulatory authorities will oversee the winding-down of Wirecard’s remaining business.
JPMorgan Chase enters the BNPL space. The global bank entered the “buy now pay later” marketplace, launching My Chase Plan, which will give its credit card customers the option to pay for purchases over a period of time with no interest (but a monthly fee).
Shopify and Alipay announced partnership. The e-commerce and digital wallet platform giants announced a cross-border commerce partnership in which Shopify merchants can seamlessly accept payments through Alipay, giving them access to over one billion annual active users in China alone.
Cardless launches platform. The San Francisco-based consumer credit card fintech, which helps other companies offer co-branded credit card programs, is “the first new mass-market credit card firm to launch in more than 25 years.” Cardless has raised over $10 million in VC funding since starting up.
Pop Flies
PayPal announced a partnership with Amex to allow customers to split payments.
Daylight launched the newest challenger bank to cater to underserved LGBTQ+ customers.
Douugh, another new challenger bank, moved out of beta mode and launched in the U.S.
Robinhood is rumored to be seeking advisors for a potential 2021 IPO.
The SEC allowed social media platform IMVU to issue a stablecoin without registering as a security.
Fundings!
Homeownership platform Better.com raised $200 million in Series D funding.
BaaS provider Griffin raised £6.5 million in new funding.
Northstar raised $7.3 million in Series A funding to work with employers and offer financial wellness as a benefit to employees.
Fireblocks raised $30 million in Series B funding to continue building its blockchain infrastructure.
Digital estate planner Trust & Will raised $15 million in Series B funding.
Cross-border payments company Chipper Cash raised $30 million in Series B funding from Ribbit Capital and Jeff Bezos to expand its products and geographic scope.
BNPL provider for small businesses Credit Key raised $33 million in new funding.