Visa goes BNPL 😲; Nubank launches remmittances 💸; Platform for the rich to get richer 😎

Good Morning FinTech. 12/30

iCapital’s ideal customer…

Good morning Everyone,

Happy Friday! It’s been a hot and intense week. Before the weekend getaway, here are 3 FinTech stories to make your day more productive:

Visa goes BNPL 😲

Announcement 🔔 Payments giant Visa has just announced creating Buy Now, Pay Later instalment payment services for its credit card-issuing customers.

What is known 💭 Visa is reportedly rolling out pilot BNPL services in the US, Canada, Russia, and Malaysia.

The credit card platform has set up a BNPL website for credit card issuers — mainly banks and credit unions as well as financial technology companies — that use its payment network. Merchants offer BNPL financing to consumers primarily during checkout when they shop online.

✈️ THE TAKEAWAY

This is both huge and interesting move… Getting into the BNPL space, Visa hopes to counter the threat of PayPal, Affirm and other notable players in the space. More importantly, it might be a play to get ahead in the game of Apple, which is also encroaching into the consumer financing space, especially with their recent Apple Pay Later play. Yet, it must be noted that Visa first aims to make it easier for banks such as Wells Fargo and Chase to provide instalment loans to consumers. While BNPL services have focused on online shopping checkout, Visa has developed pre- and post-purchase options for credit card issuers. This might be exactly the differentiator Visa needs to stay in this game and be relevant.

Nubank launches remmittances 💸

The partnership 🤝 Nubank, the Brazil-based neobank and the world’s largest digital challenger bank, by user count, is now offering a remittances feature to its users that will work in more than 100 countries. The feature is being rolled out in partnership with Remessa Online, a transfers vendor that is also based in Brazil. 

Coverage 🌎 The money transfer feature works in other Western Hemisphere countries—including the US, Mexico, Argentina, and Chile—plus markets farther out from Brazil like the UK, Australia, Portugal, and Japan. 

Numbers 📊 Remessa Online expects the Nubank partnership to amp up its user base from the 350k it has served within the last 12 months to 1M. The transfer vendor is offering a 15% discount to Nubank users, which will run for the offering’s initial 8 weeks.

✈️ THE TAKEAWAY

Huge opportunity 🥊 Remmittances is a huge play for Nubank to tap into. For example, the total remittances sent to Nubank’s home market (Brazil) is $3.57B in 2020, according to data from The World Bank. More importantly, remittance feature will help Nubank build its brand awareness both within existing markets—the neobank also does business in Mexico and Colombia—and with transfer recipients who live outside of its current service area.

Platform for the rich to get richer 😎

Money in 💸 The US-based wealthtech platform iCapital reached a whopping $4B valuation, and it will use the funding to broaden access to private market investment options and make acquisitions.

The biz 📲 Launched in 2013, iCapital helps banks and asset management firms offer high-net-worth (HNW) clients exposure to private market investments. Financial advisors can access and manage private equity, private credit, real estate, and hedge funds directly from its turnkey platform or create their own white-label offering from iCapital’s custom solution.

The value add 📈 90% of private market AUM is held by institutional and ultra-high-net-worth investors, per a Morgan Stanley and Oliver Wyman report. HNW clients—those with $1M to $50M in investable wealth—have traditionally struggled to invest in private markets because they lack awareness of the asset class and firms impose high minimum thresholds, per the report. iCapital aims to close that gap by bringing institutional-quality private market solutions to individual investors.

✈️ THE TAKEAWAY

The rich want to get richer… 🤷‍♂️ iCapital’s significant valuation underlines the importance of wealth and asset managers offering broader investment options to HNW investors. Given the market size and cash-rich customers, it’s a lucrative business model and a wealthy market to tap into.

🔎 What else I’m watching

• BoA votes for crypto 👀 Bank of America (BofA) called central bank digital currencies “a much more effective payment system than cash,” in a recently published research paper. The Charlotte, N.C.-based bank, the second largest in the U.S. by total assets, said that CBDCs could “replace cash completely in the (distant) future.”

• FinTech to VC 💸 Hong Kong-based cross-border FinTech Airwallex has announced launching an early-stage venture capital fund dubbed Capital 49. The fund is targeting a corpus of $200M from Airwallex’s founders. Some of the sectors it is targeting are ecommerce, Software-as-a-Service (SaaS), and FinTech. Capital 49 has invested in two fintech companies so far.

💸 Following the Money

• US-based Behalf, a provider of in-purchase financing solutions for B2B sellers and buyers, has announced $19M in new venture financing.

• Prime Trust, a shop for financial infrastructure for fintech innovators, has announced the close of its $64M Series A round.

• India-based FinTech startup Slice has announced that it has raised $10M in funding in from multiple financial institutions.

• Crypto trading and lending platform Vauld has raised $25M in a Series A funding round led by Peter Thiel’s Valar Ventures.

• Development studio Horizon Blockchain Games has raised a $4.5M funding round.

• NFT utility project AlchemyNFT has raised $6M in new funding from Mark Cuban and others.

• Livepeer, a decentralized video streaming platform built on the Ethereum blockchain, has raised $20M in a new funding round.

• Citizens Financial Group, Inc. which operates Citizens Bank branches in 11 states, has entered into an agreement and merger plan valued at approximately $3.5B to acquire all outstanding shares of Investors Bancorp, Inc., Inc. for a combination of stock and cash. Investors operates 154 bank branches in greater New York City and Philadelphia metropolitan areas and throughout New Jersey.

• Paxos, the firm powering PayPal’s crypto service, has received $300M in Series D funding from a heavyweight list of investors including Bank of America, FTX, Peter Thiel’s Founders Fund and Coinbase Ventures.

• UK-based Lloyds has announced that it intends to acquire the Embark Group (Embark), a fast-growing investment and retirement platform business.

👋 That’s it for today! Thank you for reading and have a productive Friday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:

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