Apple’s state ID feature as a growth factor for Apple Pay 👀; The biggest Series A ever by African FinTech 💸; PayPal is super serious about BNPL🇯🇵

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Hey Everyone,

And happy Sunday! Hope you had a wonderful week. To make it better, I invite you to take a look at three stories that were moving headlines this week in the financial technology world. You can uncover other stories, keep the FinTech pulse daily and get at least X5 more by becoming a subscriber. Join the community here:

And here’s a mix of 3 great stories from this week:

Apple’s state ID feature as a growth factor for Apple Pay 👀

The news🔥 Residents in 8 states, including Arizona, Connecticut, and Georgia, will soon be able to add their state IDs and driver’s licenses to the Apple Wallet, Apple confirmed in a press release.

It’s not going to stop here 🥊 Apple plans to enable the feature in other states soon and said that the Transportation Security Administration (TSA) will accept the digital IDs for travel at select airport security checkpoints. The tech giant first hinted at plans to enable the feature back in June.

Why does this matter? 🤔 At the core, the digital ID feature can help boost Apple Pay’s US user base, which is expected to hit 43.9M this year, accounting for 43.4% of all proximity mobile payment users. Which means there’s still a ton of room for growth.

✈️ THE TAKEAWAY

Apple ID first, Apple Pay later. Despite seamless experience and functionality, the digital ID feature by Apple might incentivize iPhone users to put credentials in Apple Wallet that eventually get them on board with Apple Pay. Because as of right now, less than 40% of iPhone owners use Apple Pay, giving the wallet a large untapped addressable market. And converting these customers into Apple Pay users could not only bolster volume but also increase Apple’s share of US mobile payments. Furthermore, we have to speak about the engagement here. Giving existing Apple Pay users another reason to use Apple Wallet keeps customers tied to its ecosystem. This can increase Apple’s already strong brand loyalty and might make users more inclined to try out other Apple payment solutions, like the Apple Card.

The biggest Series A ever by African FinTech 💸

Senegal is making waves🇸🇳Wave, the U.S. and Senegal-based mobile money provider has raised $200M in Series A round of funding. The investment is the largest-ever Series A round for the region, and it values Wave at $1.7B.

The biz 📲 Despite being founded in just 2018, Wave is already the largest mobile money player in Senegal and is showing strong growth in Côte d’Ivoire. While similar in functionality to PayPal, the Wave App does not require that customers have a bank account and instead runs a network of 'agents' (small local businesses) who use their on-hand cash to service Wave users.

Born out of pivot 🚀 Drew Durbin and Lincoln Quirk founded Sendwave in 2014 to offer little or no fee remittances from North America and Europe to select African and Asian countries. The YC-backed company became a WorldRemit subsidiary last year when the global fintech paid up to $500M in cash and stock for Sendwave, according to TechCrunch.

But before that, the team stealthily worked on a mobile money product described as having no account fees and “instantly available and accepted everywhere.” In 2018, the product was piloted as Wave in Senegal but it was still within the Sendwave ecosystem. When WorldRemit acquired Sendwave, Durbin and his team turned their focus to Wave.

✈️ THE TAKEAWAY

Mobile Money is still unsolved? Many know that mobile money is very hot in Africa and that it has leapfrogged the developed countries by quite a bit in this regard. Yet, it seems that there’s still room for growth. And Wave might know the secret sauce here. It must be noted that deposits and withdrawals at Wave agents are free. Wave users pay only 1% to send money which is about 70% less than telecom-led mobile money.
Furthermore, for users without a smartphone, Wave provides a free QR-card that allows anyone to transact with an agent. Add this all up and it’s clear how Wave has managed to grow to several million monthly active users and billions of dollars in annual volume. And I sense that they are only getting started…

PayPal is super serious about BNPL🇯🇵

The scoop 🤝 Payments giant PayPal has agreed to acquire Japan-based Buy Now, Pay Later provider Paidy for a whopping $2.7B. It must be noted that this is reportedly a mostly-cash deal (which makes a ton of sense for PayPal).

Unicorn in Japan🇯🇵 Paidy, founded in 2008, is one of Japan’s few unicorns. The company launched the country’s first zero-interest post-payment service in 2020.

Paidy allows its 6 million registered users to split the cost of goods into three equal instalments with no interest. Users can pay off their balance using cash at convenience stores or bank transfers. The company has relationships with some of the biggest brands worldwide.

No IPO… 🤷‍♂️ Paidy was valued at $1.3B when it raised $120M in March 2021 and was expected to list its shares in Tokyo in 2021. It has been backed by trading house Itochu, Goldman Sachs, and Soros Capital Management along with PayPal.

Having the exit offer which is x2 the last private valuation, the choice is obvious.

✈️ THE TAKEAWAY

PayPal is serious. And it’s especially serious about the BNPL. Paidy’s acquisition deepens PayPal’s push into the crowded BNPL sector, where consumers are increasingly willing to spread the cost of goods over a small number of payments. More importantly, the tie-up builds on PayPal’s payments capabilities in Japan, which is the world’s third-biggest e-commerce market.

🔎 What else I’m watching

• FinTech Guidance 📄 Guidance published in collaboration with several federal agencies was recently handed down to offer voluntary counsel for community banks launching partnerships with FinTechs, according to a recent report. The Federal Deposit Insurance Corporation (FDIC), the U.S. Federal Reserve (Fed), and the Office of the Comptroller of the Currency (OCC) collaborated to develop the 20-page report, called “Conducting Due Diligence on Financial Technology Companies: A Guide for Community Banks.”

• Bank from a Bank🏦 Standard Chartered has agreed on a joint venture deal to launch a digital-only bank in Singapore with the country's National Trades Union Congress (NTUC). A Standard Chartered vehicle will take a 60% stake in the venture, worth $107.28M, with the NTUC's enterprise arm taking the remaining 40% stake. The Standard Chartered vehicle involved in the transaction obtained a full Singaporean banking license in December 2020.

• New Robinhood feature📲 The brokerage app company said that the feature would help reduce the impact of crypto's volatility by allowing users to invest in intervals rather than in large lump sums—a strategy known as dollar-cost averaging. The product will be available to a select number of users starting Wednesday.

💸 Following the Money

• Challenger bank Point has raised a $46.5M Series B funding round. The company offers an account associated with a debit card, positioning itself as a premium debit card company and trying to offer credit card rewards with debit cards.

• BP Ventures, an investment company of UK-based BP, has invested EUR 20M in Germany-based payments startup Ryd to expand its services in the international market.

• Founded by an ex-Klarna, iZettle, and Spotify trio, consumer credit refinancer Anyfin has raised £7.3M from London-listed fintech investor Augmentum Fintech, in what seems to be an extension of the Swedish fintech’s Series B.

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

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