Fintech Update, 9/21 - 9/27
Hi! It’s Monday September 28, 2020.
Leading Off
The OCC announced that national banks now may hold reserves on behalf of stablecoin issuers, while the EU published draft plans for the regulation of crypto-assets throughout the bloc. // Walmart and Goldman are teaming up to extend small business lines of credit to merchants on Walmart’s Marketplace platform. // Meanwhile, Square plans to invest $100M in Black communities; the EU is considering new rules that would force Apple to opens its NFC technology to competitors; Robinhood raised a fresh $460M as part of its Series G round; former Capital One and PayPal execs launched a new digital bank, One; and Petal raised $55M in Series C funding. // All this + more, below!
Heavy Hitters
Global regulators appear to be getting more comfortable with crypto. Two big moves coming from financial regulators last week: First, the US Office of the Comptroller of the Currency (OCC), the country’s national bank regulator, announced that national banks have the authority to hold reserves on behalf of stablecoin issuers. Second, the European Commission (EC) released its first-ever plan to regulate crypto-assets throughout the bloc [full text]. While the regulators and the announcements themselves represent significantly different scopes, both suggest a growing comfort among rule-makers when it comes to cryptocurrencies, as well as an acknowledgement that the space may require additional regulatory clarity to function safely and soundly. The OCC’s action, for example, is aimed at providing “greater certainty” for banks and financial services firms that work with stablecoins (and extends the OCC’s recent “flurry of fintech-related activity”). Meanwhile, the EC hopes its proposed rules will encourage crypto-related firms to operate throughout the EU – the plan will allow a company “authorized by one of the 27 EU countries . . . to provide its services across all the other member states” while simultaneously clarifying and toughening the requirements for such authorization.
Walmart partners with Goldman Sachs. The retail and financial services giants are teaming up to help the Walmart’s Marketplace sellers gain access to lines of credit via Marcus by Goldman Sachs. Initially, approved sellers will have access to lines of credit from Marcus between $10,000 and $75,000, with plans to increase future lines substantially down the road. The partnership appears quite similar to the one between Amazon and Goldman, announced earlier this year, whereby eligible small business owners who sell on Amazon’s platform received offers for revolving credit lines from Marcus. The move helps Goldman further tie its consumer banking product to high-profile brands, as partnerships with tech companies and major retail companies become increasingly entrenched with the growth of the financial giant’s consumer bank.
Quick Takes
Square plans to invest $100M in Black communities. The payments firm will invest nearly 3% of its cash in a range of funds (like the Keepers and Black Economic Development Funds) and lenders (like Community Development and Minority Depository Financial Institutions) that focus on underserved communities of color.
The EU is considering requiring Apple to open ApplePay to competitors. The European Commission is considering a new package of laws that would “prevent mobile device manufacturers from limiting access to near-field communication technology,” which would force Apple to allow competitors to use its Apple Pay service. The report follows the EU’s antitrust investigation into Apple and other BigTech firms.
Venmo tells customers to pay up, despite pandemic. The WSJ found that the popular payments app has taken a hard line against users overdrawing their accounts, despite the compassionate image the firm has worked to cultivate during the pandemic. In some cases, Venmo threatened to send debt collectors to collect from alleged victims of scams who now have negative account balances.
Robinhood extends latest round with additional $440M. Stop us if you’ve heard this one before… the popular fee-free stock trading firm just brought in a Sherwood Forest-sized pile of cash. This time, it’s a $460 million expansion on its previously announced $200 million Series G round, which brings the round up to $660 million total and raises Robinhood’s valuation to $11.7 billion.
Capital One and PayPal vets announce new digital bank. Former Capital One VP Brian Hamilton and former PayPal CEO Bill Harris launched their new digital bank, One. The new offering joins an increasingly crowded space in the U.S. market, though One’s focus will be on the “52% of Americans [who] live in ‘middle-income’ households [that do not have] a banking service actually built with them in mind."
Ant Group launches blockchain-based trade finance platform. The Chinese fintech giant announced “Trusple” (a portmanteau of “Trust Made Simple”), a new blockchain-based platform “designed to solve problems for SMEs and financial institutions involved in cross-border trading.”
Russia’s largest tech company bids for its largest digital bank. Yandex is looking to purchase TCS Group for $5.5B, acquiring its digital bank Tinkoff, as it looks to add to a portfolio which includes the country’s leading search engine and ride hailing app. The move is seen as a challenge to Sberbank, Russia’s biggest bank and former Yandex partner.
Mastercard expands digital first card program. The global payments processor announced the expansion of its Digital First Card Program in North America, partnering with other processors to provide foundational digital guidelines that will enable consumers to experience a best-in-class digital banking experience.
Square launches new payroll features. Square’s newest feature will allow some small business employees to get a portion of their earned wages ahead of time and, through the new instant payments feature, will let businesses fund payroll immediately using money in their Square balance.
Stripe and Salesforce partner on cloud payments. Stripe will power Salesforce’s Commerce Cloud Payments, which aims to streamline the payment customer process, by allowing Salesforce customers to set up their payment processing platforms using Stripe’s technology. Salesforce’s e-commerce spending has jumped 71% over last year.
Pop Flies
Privacy announced a new partnership with 1Password that will allow users to create, use, and save Privacy Cards directly within their 1Password extension.
Canadian payment technology solutions provider Nuvei raised $700 million in its IPO.
European financial management and payments firm Neo launched an international, multi-currency SME bank account.
Other Fundings!
Small business insurance provider Next Insurance raised $250 million in Series D funding, bringing the company’s valuation to over $2 billion.
Medium-sized business software and payments provider SpotOn Transact raised $60 million in Series C funding (only 6 months after raising $50 million in a Series B!).
Compliance-as-a-service platform Laika raised $10 million in Series A funding.
Kard, the French challenger bank built for teenagers, added $3.5 million to its seed round.
Petal, the credit card company that helps people build credit and spend responsibly, raised $55 million in Series C funding.
Greenlight raised $215 million in Series C funding, at a $1.2 billion valuation, to continue helping parents raise financially-smart kids.