Monzo & Curve Flexing 😬; Airwallex hits $4B valuation to be the Apple of Business Finance 🤯; PayPal’s Super App is now live 📲
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Hey Everyone,
And happy Sunday! I’m more than sure had a wonderful week. To make it even 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 (the newest issue is coming out tomorrow):
And here’s a mix of 3 great stories from this week:
Monzo & Curve Flexing 😬
It’s all about BNPL 🤷♂️ UK well-known FinTech challengers Monzo and Curve have both finally entered the buy now, pay later (BNPL) market with separate offerings. Both of them are called Flex though… 😬😬😬
The Flex 👉 The two BNPL products were launched very recently and share some similarities. Here’s what they are all about:
Curve Flex:
Say it’s “the most flexible credit solution in the market”.
It charges a flat rate APR of 13% but offers no 0% period.
Curve Flex is not restricted to specific merchants, accounts, cards, or products, which means that Curve customers can convert almost any purchase made on any card linked to the Curve platform in the past 12 months into an instalment plan of 3, 6, 9 or 12 instalment loans.
Its patented ‘Go Back in Time’ technology allows its customers to swipe a transaction, select the number of instalments, and the transaction is then refunded in full almost immediately.
Curve received FCA approval for Curve Flex on 1 September, having been in testing since September 2020.
It said that 1,600 beta users have already “flexed” around 7,000 transactions into affordable instalment loans worth more than £1 million.
Monzo Flex:
Monzo says that they had “listened to customers and designed a better way for them to pay later, which puts them in control. Monzo added that its Flex product provides an “improved” way to pay later by combining the elements of BNPL, credit cards, loans, and overdrafts.
Eligible Monzo customers can pay for purchases over £30 in 3 instalments at 0% interest or over 6 and 12 monthly instalments at 19% APR (variable). Credit is limited to £3,000.
The product is available everywhere that customers pay with Monzo, meaning it can be used online and in-person.
Instalment plans can be edited at any time, and there are no fees for those who choose to pay off extra or early. Monzo also confirmed that if a customer fails to make a payment on time, there are no fees.
Customers can “flex” a Monzo transaction up to two weeks later.
✈️ THE TAKEAWAY
Flexing together? 🤔 As noted numerous times, Buy Now, Pay Later is everywhere and it’s undoubtedly one of the hottest verticals in FinTech right now. Neobanks in 2021 are starting to notice that too and virtually everyone now has a BNPL play (thank god not everyone calls it Flex 😬)… And it actually makes perfect sense. First, the demand for the BNPL is booming. More importantly, it is expected that BNPL can really challenge the credit card biz, which is one of the most lucrative and competitive financial services markets in the world. Speaking about Monzo vs. Curve, it’s really ironic that both called their product exactly the same. How awesome/bad is that? 😂 On a more serious note, Curve’s BNPL play looks more interesting despite it doesn’t have a free version. Yet, Monzo is said to have over 5M customers (around x2 more than Curve), which provides it with a much bigger base to push their product to. All in all, it will be very interesting to see which Flex will win the market
Airwallex hits $4B valuation to be the Apple of Business Finance 🤯
The money 💸 Payments technology company Airwallex has raised $200 million in an oversubscribed Series E funding round that values the FinTech payments platform at $4 billion.
The round - which comes just 6 months after a Series D extension at a $2.6 billion valuation (not too shabby!😎)- was led by Lone Pine Capital and joined by G Squared, Vetamer Capital, 1835i Ventures, DST Global, Salesforce Ventures and Sequoia Capital China.
The numbers 📊 Airwallex has seen year-over-year revenue growth of nearly 150% for the first half of 2021, processing more than $20 billion for a global client portfolio that has quadrupled in size. The company has nearly doubled its headcount in 2021 and employs almost 1000 employees today.
In addition to tens of thousands of SMEs, it also, via APIs, powers financial services for other companies like GOAT, Papaya Global, and Stake
Future plans 👉 The funding will support plans for global expansion, product development, and grow sales and commercial teams, and increase its breadth of offerings for SMEs and larger enterprises operating in the digital economy.
✈️ THE TAKEAWAY
The future of finance is embedded. That’s why Airwallex wants to be like the Apple of business finance. And it seems they know how to achieve that. First, Airwallex has built all the infrastructure for the business banking services that it provides directly to businesses with a focus on small and medium enterprise customers (SMEs). Second, it has packaged up that infrastructure into a set of APIs that a variety of other companies use to provide financial services directly to their customers without needing to build those services themselves. It seems to be working really well, so you should definitely keep your eyes on Airwallex.
PayPal’s Super App is now live 📲
It’s finally here 👀 Payments heavyweight PayPal has been talking about its Super App plans for quite a while, but the time has finally come. The first version of their all-encompassing app is officially being introduced. And it offers a ton of different features.
A proper Super App 📲 The new app from PayPal is offering a combination of financial tools including direct deposit, bill pay, a digital wallet, peer-to-peer payments, shopping tools, crypto capabilities, and more.
The company is also announcing its partnership with Synchrony Bank for its new high-yield savings account, PayPal Savings. PayPal Savings will offer high-yield savings account with a 0.40% Annual Percentage Yield (APY), which is more than six times the national average of 0.06%. Not impressive, but still better than at a bank… 🤷♂️
The shift 👉 These new features and revamped app illustrates PayPal’s shift from being primarily a payments service provider to a more fully fleshed out finance app. Or Super App. And that’s ambitious.
✈️ THE TAKEAWAY
Long-awaited pivot. PayPal had to do it and try it. With constantly growing competition and increased acceleration from the FinTech challengers, the Super App play was a rational move to stay relevant. More importantly, it’s a brilliant way to connect and leverage PayPal’s ecosystem of circa 400M users and over 29M merchants. Although PayPal says it doesn’t want to be a bank, their new set of features are aimed towards making themselves more competitive against the likes of Varo or Chime that are targeting customers who want to shift their finances from banks to neobanks. And in general, if anyone is capable of doing a global Super App, it’s probably PayPal. But Square is watching this closely too…
🔎 What else I’m watching
Square’s European expansion🇪🇸 Payments platform Square is seeking businesses in Spain to participate in the beta testing of its Early Access Program, which offers exclusive access to omnichannel tools. The tools — currently used by millions of businesses worldwide — are intended to make it easier for businesses and freelancers to sell and deliver their services. Spanish merchants that enroll in Square’s Early Access Program can start using the products within days and without contracts or startup fees. Square hardware is available at no charge. PayPal & SumUp should take notice… 👀
BNPL in India🇮🇳 Flipkart, an India-based e-commerce company, has partnered with a payment service provider, Davinta, to offer Buy Now, Pay Later (BNPL) credit solutions to all its retailers. With more than 60,000 small businesses in India, a majority of whom struggle to get access to traditional credit, BNPL offers financial inclusion and provides credit access to these small businesses. As the economy recovers back to normal and the festive season is coming up, consumer demand is increasing and so is the demand for credit among retailers, Flipkart says.
Another one 😑 First National Bank of Omaha (FNBO) launched a buy now pay later platform to give its merchant partners the option to allow customers to buy things and pay for them in the future, either a few weeks later or as long as 10 years from the date of purchase. FNBO worked with operations management and analytics firm EXL and point-of-sale loan origination service Skeps on the BNPL initiative, which can be used both online and in stores. Looks like everyone is doing BNPL now…
💸 Following the Money
Deutsche Bank has acquired Berlin-based payment service provider Better Payment to expand its market share in the fast-growing market for online payment processing and acceptance. Better Payment operates a payments gateway that enables merchants to send and receive multiple forms of online payments and is currently installed at 1500 retailers.
dopay, a B2B2C payments platform that aims to serve unbanked workers in emerging markets has closed a GBP 13.2M in a Series A funding round.
The Canada-based cloud-based software company, Salesforce, has invested in Razorpay to help it expand in the business banking space.
Recharge.com, a Netherlands-based payment service provider, has closed a Series B funding round led by SmartFin with $35M, helping to accelerate its expansion.
👋 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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