Fintech Update, 4/10 - 4/16
Hi! It’s Monday, April 17th, 2023.
The Rundown
Faster payments, fewer constraints – Two new products debuted that promise to help speed up payments and remove barriers between wallets: First, Visa launched Visa+, an interoperable payment offering that allows customers to transfer funds between different P2P payment apps. Moving money between PayPal and Venmo, Visa’s two initial partners, typically requires both counterparties to open accounts on with one of the services, or perform a bank transfer. The new service allows users to set up a unique payment handle in the participating apps, share that handle with whoever needs to pay, and Visa facilitates the payment. Currently, Visa+ presents a narrow use case (ad hoc, instant payments between PayPal and PayPal-owned Venmo), but Visa is pushing to expand third party usage with WesternUnion, TabaPay, and others. Next, Plaid announced that its Plaid Transfer service will operate on the private, bank-owned Real Time Payments network, eliminating the multi-day settlement periods typically involved in traditional ACH network-based transactions. Both announcements point to a growing competition among companies to capture value from and incentivize bank-to-bank payments, particularly ahead of the Federal Reserve’s expected release of its long-awaited FedNow real-time payments offering this summer.
Walmart sued Capital One, the bank sponsoring the retail giant’s credit card program, alleging that the bank breached its contractual obligations related to customer service [full text]. The agreement in question is the contract that Walmart signed in 2018 making Capital One the exclusive issuer of Walmart’s private label and co-branded credit cards in the United States, which Walmart claims the bank violated by “fail[ing] to meet a Critical SLA, five or more times in a rolling 12 calendar month period.” The lawsuit means that Walmart’s lucrative credit card portfolio could be up for grabs – and that credit cards issued through Walmart’s partnership with One could come sooner than expected.
WhatsApp introduced the ability for Brazilian users to pay local businesses directly through the chat app. Though users in Brazil have been able to make peer-to-peer transactions through WhatsApp since 2021, until now they’ve had to exit the app to pay local merchants. The move paves the way for WhatsApp parent company Meta to tap into merchant payment services, an area of increasing focus as its core advertising revenue dwindles.
Defunct crypto exchange FTX has recovered over $7 billion in assets thanks to a recent upswing in crypto prices. The company is exploring ways to re-open, according to its attorneys. Because learning from past mistakes is for suckers.
Twitter partnered with eToro to “show real-time information about stocks and crypto prices” and redirect “users to the eToro site where they can engage in trading.”
The Central Bank of Montenegro is partnering with crypto solutions provider Ripple to pilot a central bank digital currency.
The Reading Nook
a16z published its annual 2023 state of crypto report, which “aims to address the imbalance between the noise of fleeting price movements – and the data that tracks the signals that matter, including the durable progress of web3 technology.”
The FT looked at how London has “lost its lustre” as a global fintech hub: positive government sentiment (Chancellor Jeremy Hunt has extolled the country’s “world-beating fintech sector”) hasn’t been followed with meaningful government reform. The disconnect is particularly acute given a challenging period in the industry.
Selected fundings
Capital markets infrastructure provider Clear Street raised $270 million in Series B funding at a $2 billion valuation.
Altruist, a modern custodian for investment advisors, raised $112 million in Series D funding led by Insight and Adams Street Partners.
Market intelligence platform AlphaSense raised $100 million in a Series D extension round led by CapitalG.
Longest round ever, confirmed. Indian mobile payments app PhonePe raised another $100 million in new funding from General Atlantic as part of the same rolling round (valuation of $12 billion), which now totals $750 million.
Benefits administration platform Elevate raised $28 million in an undisclosed funding round led by Anthemis.
Latin American lending infrastructure provider Kala raised $4 million in new funding.
Built, the financial platform for construction and real estate, announced a strategic investment from Citi.