Revolut gears up to enter the stablecoin arena, challenging PayPal & Tether 😳🪙; JPMorgan eyes Apple Card takeover from struggling Goldman Sachs 🍎💳; Adyen keeps expanding its US presence 😤🇺🇸
You're missing out big time... Weekly Recap 🔁
👋 Hey, Linas here! Welcome back to a 🔓 weekly free edition 🔓 of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.
If you’re not a subscriber, here’s what you missed this week:
The Startup Growth Toolkit: Top 5 Resources to Scale Your Business to New Heights 🚀 [unlock the secrets to startup success with these essential resources]
Top resources for building and scaling billion-dollar startups 🦄 [600+ pages of knowledge and advice to launch & scale your next unicorn in 2024]
Klarna continues doubling down on AI: launches advanced shopping assistant 🤖🛍️ [what’s the USP here, why it matters & what’s next + bonus reads on how Klarna is crushing it in all things AI]
Stablecoins gain traction in emerging markets as dollar alternative 📈💸 [a holistic view based on the latest data, what it means & what’s next + a bonus read on how FinTech giant Mercado Libre is leveraging stables]
Nubank sets sights on Middle East expansion 👀🟣 [what it’s all about & whether it makes sense + a bonus deep dive into NU & their latest financials]
Brex aims to revolutionize B2B payments with new embedded solution 👀💳 [why it’s a brilliant move & what can we expect next + a bonus reads on Brex]
Revolut sets sights on the Middle East in ambitious global expansion 🇦🇪🏦 [what’s happening & what can we expect next + bonus reads on M&A in the Middle East & Revolut]
JPMorgan to launch UK credit cards as digital overseas gambit's paying off 🇬🇧 [a quick look at how their digital overseas gambit is paying off big time, why it matters & what’s next + a bonus deep dive into JPM & their latest financials]
Block's leadership shake-up amid regulatory challenges 😳🏦 [what happened & what it means + a bonus dive into Block & whether it’s worth your time and money in 2024]
FinTech continues to eat e-commerce 😤 [how e-commerce giants are becoming payments heavyweights, what’s next + a bonus deep dive in Shopify]
AI assistant for crypto trading? 🧐🤖 [what’s the USP here & what can we expect next + bonus reads on how top Finance companies are leveraging AI today]
As for today, here are the 3 amazing FinTech stories that were transforming the world of financial technology as we know it. This was one of the most intense and interesting weeks in 2024 so far, so make sure to check all the above stories.
Revolut gears up to enter the stablecoin arena, challenging PayPal and Tether 😳🪙
The news 🗞️ Revolut, the London-based FinTech giant that recently secured a whopping $45 billion valuation, is reportedly in the advanced stages of developing its own stablecoin.
This move would place Revolut alongside other major players in the rapidly growing stablecoin market, including PayPal PYPL 0.00%↑, Tether, and Circle.
Let’s take a quick look at this, see what it’s all about and what’s next.
More on this 👉 Revolut, which recently acquired a UK banking license, is said to be well along in the process of creating a stablecoin, as per multiple sources.
The company aims to expand its crypto offerings while taking a compliance-first approach to ensure a safe harbor for the crypto community.
Revolut's entry follows PayPal's launch of PYUSD in 2023, which has since become the fourth-largest stablecoin with a market cap exceeding $730 million.
Just recently, Latin American e-commerce giant Mercado Libre MELI 0.00%↑ has launched its own stablecoin too, Meli Dollar, in Brazil.
ICYMI:
As earlier, the global stablecoin market is still dominated by Tether's USDT ($119 billion market cap) and Circle's USDC (more on this - below).
Zoom out 🔎 Stablecoin usage is growing rapidly, with an estimated $3.7 trillion in value settled via stablecoins in 2023, and $2.62 trillion in just the first half of 2024.
More importantly, the stablecoin sector has proven highly lucrative, with Tether reporting a $5.2 billion profit in the first half of 2024. These tokens, typically pegged to real-world assets like the US dollar, often generate steady income by investing in government-issued debt.
As written earlier, demand for stablecoins is particularly strong in emerging markets, where they provide access to dollar-denominated assets and facilitate cross-border payments.
A YouGov survey found that 47% of cryptocurrency users in emerging markets primarily use stablecoins to access dollars.
✈️ THE TAKEAWAY
What’s next? 🤔 Looking ahead, we can expect the following:
Mainstream Adoption: as major players like Revolut and Mercado Libre enter the space, stablecoins could accelerate integration of crypto assets into traditional financial services.
Financial Inclusion: stablecoins may bring more people in emerging markets into the formal financial system, especially those underserved by traditional banks.
Regulatory Challenges: the rise of stablecoins may prompt regulators to take a more active stance in overseeing their usage or promoting local currency alternatives.
Competition with Traditional Finance: this trend may pressure traditional financial institutions and remittance companies to innovate and compete with the efficiency offered by stablecoins.
Product Innovation: companies like Mercado Libre may develop additional financial products built around stablecoins, such as savings accounts or lending services, further challenging traditional financial incumbents.
That said, as the stablecoin market evolves, Revolut's entry, alongside established players and new entrants like Mercado Libre, marks yet another milestone in the convergence of traditional finance and cryptocurrency. The growing adoption in emerging markets and the involvement of major e-commerce and FinTech players thus suggest that stablecoins are poised to play an increasingly important role in the global financial ecosystem. However, challenges remain, including navigating complex regulatory environments and building trust in a market that has seen its share of controversies. Yet, the success of these initiatives could serve as a bellwether for the future of digital currencies in mainstream finance. So watch this out!
ICYMI: Stablecoins gain traction in emerging markets as dollar alternative 📈💸 [a holistic view based on the latest data, what it means & what’s next + so bonus reads inside]
Revolut sets sights on the Middle East in ambitious global expansion 🇦🇪🏦 [what’s happening & what can we expect next + bonus reads on M&A in the Middle East & Revolut]
JPMorgan eyes Apple Card takeover from struggling Goldman Sachs 🍎💳
The BIG news 🗞️ America's largest bank JPMorgan Chase JPM 0.00%↑ is in talks with tech titan Apple AAPL 0.00%↑ to potentially take over the tech giant's credit card program from Goldman Sachs GS 0.00%↑, as per multiple sources.
The discussions, which began earlier this year, have intensified in recent weeks but are still in the early stages with no guarantee of a deal.
Let’s take a quick look at this, see why it matters, and what’s next.
More on this 👉 We can remember that the Apple Card, launched in 2019, currently has over 12 million users and approximately $17 billion in outstanding balances.
Goldman Sachs, facing losses and regulatory scrutiny from its consumer banking ventures, agreed with Apple last year to end their partnership, which includes both credit cards and savings accounts.
ICYMI: End of an era: Apple is shutting down its credit card partnership with Goldman Sachs 😳 [what happened & what’s next + some interesting bonus reads]
Goldman Sachs in Q2 2024: Wall Street giant navigates choppy waters with resilience, but headwinds persist 🌊💸 [unpacking the Wall Street giant’s most important numbers, understanding what they mean & what’s next + some bonus deep dives inside]
This is where JPMorgan comes in which is now seeking concessions in the negotiations, including paying less than face value for the outstanding balances due to concerns about subprime exposure and potentially costly terms.
The bank also wants to eliminate Apple's requirement for all cardholders to receive statements at the beginning of the month, a feature that has caused customer service issues.
Zoom out 🔎 If successful, this deal would further strengthen the ties between JPMorgan and Apple. The bank already offers Apple product deals to Chase customers and pays Apple when its cardholders use Apple Pay.
We must also note that several other financial institutions, including Synchrony Financial, Capital One, and American Express AXP 0.00%↑, have also expressed interest in the Apple Card program.
However, JPMorgan's position as the country's biggest credit card issuer by purchase volume makes it a strong contender. In other words, if Jamie Dimon wants something, he usually gets it…
✈️ THE TAKEAWAY
What’s next? 🤔 Given we don’t have a lot of details, it’s rather hard to talk about the future implications. Yet, one thing is clear - this should be a mutual win-win for both behemoths. For Apple, securing a stable, experienced, and most importantly - tech-first partner like JPMorgan would ensure the continuity of its financial services offerings, crucial for its ecosystem strategy. More importantly, given JPM’s massive breadth and FinTech ambitions, this move could pave the way for expanded financial products and deeper integration of banking services within Apple's platform. Meanwhile, JPMorgan stands to gain a loyal base of Apple customers, potentially cross-selling other financial products and solidifying its position in the digital banking space. This partnership could also accelerate the bank's efforts to appeal to younger, tech-savvy consumers. Looking ahead, as negotiations progress, watch for potential changes in the Apple Card's features and terms, which could set new standards for credit card offerings in the digital age. The outcome of this deal could thus reshape the competitive landscape in consumer finance, influencing how both traditional banks and FinTech startups approach partnerships and product development in the coming years. So watch this one out very carefully!
ICYMI: JPMorgan expands small-town presence, bucking branch closure trend 🏠👋 [what it’s all about and why it matters + a bonus deep dive into JPM & how it’s crushing it in AI + Finance]
Apple Intelligence and the future of P2P payments 🤖💸 [a holistic view of the most important AI improvements, why they matter & what’s next + a bonus dive into AI-driven Finance & how Apple can dominate here]
Adyen keeps expanding its US presence 😤🇺🇸
The news 🗞️ Dutch payments giant Adyen continues making significant inroads into the US market, as evidenced by its recent partnership with home goods retailer Crate & Barrel.
This collaboration, which extends to Crate & Barrel's CB2 brand, covers both online and in-store payments across 110 physical locations in the US and Canada.
Let’s take a quick look at this and see why it matters.
More on this 👉 The partnership is part of Crate & Barrel's broader technology transformation aimed at elevating its omnichannel retail strategy. By implementing Adyen's unified commerce solution, the retailer thus aims to streamline its payment processes and gain valuable insights into customer behavior across all shopping channels.
This move comes at a time when omnichannel commerce is experiencing a resurgence. Recent data from Adyen's Retail Report 2024 indicates that 43% of consumers use multiple channels during their shopping journey, highlighting the importance of a seamless cross-channel experience 😳
Adyen's platform will enable Crate & Barrel to consolidate all payment channels and transactions into a single system, overcoming the limitations of previously siloed information. This unified approach is expected to drive innovation and help the retailer adapt to evolving customer habits both online and in-store.
Zoom out 🔎 The partnership is obviously not just beneficial for Crate & Barrel. For Adyen, it represents another significant step in its expansion into the North American market.
The company reported a 30% increase in North American revenue for the first half of 2024 compared to the same period in 2023, reaching 243.9 million euros ($268.26M).
✈️ THE TAKEAWAY
What’s next? 🤔 This is all about Adyen as the undisputed king of unified aka omnichannel commerce. That said, the Dutch payments giant’s success with high-profile US retailers like Crate & Barrel could thus lead to further expansion in the North American market, potentially challenging established payment processors in the country. Looking at the big picture, as more retailers recognize the importance of unified commerce solutions, we may see an acceleration in the adoption of integrated payment platforms that can handle both online and in-store transactions seamlessly. It could also spark a wave of consolidation, as companies seek to build or acquire capabilities that span both digital and physical retail environments. We may also see increased investment in technologies that can provide deeper insights into customer behavior across channels. Which brings us back to Adyen. Again 😎 Bullish.
ICYMI: PayPal and Adyen join forces for the first time to change the game in payments 🤝💳 [what it’s all about & why it’s huge + bonus deep dives both into Adyen & PayPal and an extra one into Shopify]
Adyen's unified commerce prowess keeps on delivering 😤💸 [breaking down the key numbers, why they matter & why you should be bullish on Adyen + a bonus read inside]
🔎 What else I’m watching
Metro Bank Cuts 300 Jobs; Inks Infosys Deal 🏦 UK lender Metro Bank is cutting around 300 jobs and partnering with Infosys for an IT overhaul to achieve £80 million in annual savings. The job cuts will affect business operations, IT, and support divisions, adding to a 20% headcount reduction announced last year. The bank, which faced an accounting scandal, is transitioning to a more cost-efficient model, reducing store hours, and investing in automation and digital channels. The Infosys deal aims to use Topaz generative AI technologies to enhance the customer experience.
Australia Prioritizes Wholesale CBDC Over Retail 💵 The Reserve Bank of Australia (RBA) will prioritize the issuance of a wholesale central bank digital currency (CBDC) over a retail CBDC, citing a lack of clear business case for the latter. A central bank and treasury review concluded that Australians are well-served by the current retail payments system. The RBA noted that motivations for retail CBDCs in other jurisdictions have less resonance in Australia. However, the RBA remains open to reassessing this stance as benefits and costs become better understood. The report highlights the potential of a wholesale CBDC in enhancing wholesale markets. Next month, the RBA will launch 'Project Acacia' to explore improvements in wholesale markets through tokenization and new settlement infrastructure.
Deutsche Bank to Close Branches in Favor of Video Advice 🏦 Deutsche Bank plans to shutter a "mid-double-digit number" of branches while investing in telephone and video channels for personal advisory services. The bank is responding to customers' increasing preference for remote advice, which offers convenience and extended consultation hours. Teams from nine locations already provide remote advice to personal banking clients, and successful tests at two locations will lead to nationwide expansion for wealthier clients in the private banking segment. The bank will invest in new branch equipment, including ATMs, and convert some branches into private banking centers. Further investments in digitization, such as a revamped mobile app, are planned.
💸 Following the Money
Mashreq Bank has sold a 65% stake in its subsidiary, IDFAA Payments Services, operating under the NeoPay brand, to Arcapita Group Holdings and Dgpays.
Standard Chartered's investment arm, SC Ventures, has joined a funding round for European crypto-asset exchange One Trading. The round also saw existing investor MiddleGame Ventures increase its stake and participation from SpeedInvest.
The universal proof generation layer developer Fermah raised $5.2M in seed funding.
👋 That’s it for today! Thank you for reading and have a relaxing Sunday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:
Thanks for a fab read as always!