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Uncle Sean Update - 2/4/22

Welcome to February - Brrrr!!!! Don’t forget to sign up here to have the Uncle Sean Update sent straight to your inbox each week – and forward to your friends too!!! Here is the Uncle Sean Update for 2/4/22:

• A special shout out to the Community Bankers Association of Oklahoma for being the most recent association for community bankers offering access to the Bankers Helping Bankers platform this week for their member banks in Oklahoma!!!! This keeps on getting better and better!
• Little known fact… Uncle Sean is an alumnus of Moore High School in Moore, OK – GO LIONS!!! 😊

• Okay, okay – just some quick macroeconomic data and I promise I’ll be brief! Check out that Jan BLS Jobs Report – WHOA!!! 
• The U.S. added 467K jobs in January which is significantly higher than consensus expectations of 155K – and we were being told to brace for a lower than expected number as recent as yesterday!
• But wait – there’s more!!!! Prior month revisions reported today were also massive! On the same Jan BLS Jobs Report, Dec was revised up to 510K from 199K; and Nov was also revised up to 647K from 249K. WOW!!!
• Just confirms how difficult it has been for all of us to forecast accurately with the recent Omicron spike and quarantine protocol reducing from 14 days to 5.
• Uncle Sean’s “off the rails” commentary – of course interest rate increases are coming….. And that could spell trouble for fintech challenger banks that operate on a single source revenue model of debit interchange. Bank NIM will benefit from rising rates (assuming credit quality remains in check), but debit interchange doesn’t move in conjunction with Fed rate increases.

• TD Bank becomes the latest high-profile institution to revise overdraft policies for 2022. The bank did not disclose a timeline, but did state the following changes throughout the year:
• $50 overdraft threshold before incurring an OD fee.
• A 24 hour no-fee cure period for customer overdrafts greater than $50.
• Elimination of the transfer fee for customers using other account linked overdraft protection services.
• Pro-active low balance alerts to inform customers when their account balances are low.

• Zelle flexes their muscles with strong payment volume showing $490B in payments for 2021 citing an increase of 49% year over year.
• Not meaning to kick a company while they are down (PYPL stock falls on weak guidance), but comparatively - PayPal reported Venmo Total Payment Volume (TPV) of $230.1B for 2021 growing 44% year over year. 

• Speaking of payments, Nacha reports record 2021 ACH Network payments of 29.1 billion payments valued at a whopping $72.6 trillion with strong growth in B2B and Same Day ACH.

• And more payments - The Federal Reserve gave us a glimpse into the upcoming FedNow pricing approach and credit transfer limits. While the full 2023 FedNow Service fee schedule will be published later in 2022, we get a sneak peek at some of the details:
• $25 monthly participation fee for every RTN enrolled in the service
• $0.045 per credit transfer to be paid by sender
• $0.01 request for payment (RFP) message to be paid by the requestor
• Default credit transfer transaction limit of $100K with a maximum of $500K

• TruboTax by Intuit (yep – they are a fintech too – check out the turbo debit card which is actually a prepaid Visa GPR issued by GreenDot) and Coinbase announced a plan where TurboTax customers can get their tax refund deposited direct into their Coinbase account and automatically converted into cryptocurrency.
• Here is some more detail from the Coinbase blog as well as the TurboTax site

• Amount (bank technology provider – we refer to this as FI FinTech) acquires Linear Financial Technologies for $175M. This deal makes sense to Uncle Sean (without access to the financial data) as Amount’s existing model is retail banking based featuring account opening, loan originations, cc applications, plus merchant POS BNPL solutions. Linear’s platform covers SMB loan and account origination which is a perfect compliment to Amounts consumer portfolio and Linear has already rebranded as Amount Small Business.

• Revolut US has been enhancing their cross-border remittance platform – specifically in the competitive US / Mexico transfer corridor. Now boasting 30 minute settlements from US to Mexico for free. Here’s a little detail on how we got here:
• Revolut launched in the US in March 2020
• Launched low cost US-MEX transfers in July 2021 at the real exchange rate
• Shortly thereafter introduced 10 free international transfers per month for Revolut US customers
• And now announces the ability to processes settlements within 30 minutes for US-MEX free transfers

• Paysend (international transfers) announces agreement with Visa Direct allowing US customers to provide real-time international payment transfers to eligible Visa cardholders in over 107 countries.

• T-Mobile launches True Name by Mastercard for T-Mobile Money debit card.

• Square (err Block) announced the completion of the Afterpay acquisition with a $29B price tag (cha-ching). Uncle Sean posted a deeper dive back in August at the time of the announcement with the punchline being – it’s all about the Square Seller ecosystem.
• At that time… “Afterpay makes about 84% of their revenue by charging the merchant 4% - 6% on BNPL purchase volume. Afterpay’s purchase volume is about $16B right now per the investor deck. Square merchant side process volume is about $140B currently. A lowly 10% BNPL adoption into the Square merchant platform will essentially double the Afterpay revenue. Now THAT is ecosystem integration. Not to mention the fact that Square just got huge international expansion overnight.”
• And now we wait to see how this unfolds with the CFPB digging deep into BNPL in the US…..

• Monzo (UK challenger bank) officially exits beta in the US and finally goes live after 18 months.

• Notable FinTech funding for the week:
• Floatme raised $16.2M in Series A
• Phantom (crypto wallet on the Solana ecosystem) raised $109M in Series B funding round at a $1.2B valuation. Funding will be used to expand across multiple blockchains including Ethereum. This is a huge round considering their $9M Series A was only six months ago.
• First Dollar (HSA PFM app) raised $14M in Series A funding. Think of this as an intelligent “health wallet” that allows consumers to use HSA, FSA, and HRA tax-advantaged benefits with the ease of one card (Mastercard issued by Piermont Bank) and not having to worry about receipt reimbursements.
• Boopos (alt business lending including M&A financing) raised $30M in capital including Seed funding plus Series A
• Mos (challenger bank focused on students) raised $40M in Series B round at a $400M valuation
• PlexTrac (cybersecurity software) raised $70M in Series B funding
• CoinLedger (crypto tax software – fka CryptoTrader.Tax) raised $6M in funding
• Tribal (corporate card and B2B payments platform) raised $60M in Series B funding round

Random Uncle Sean Stuff:

• Well…. Did he, didn’t he, did he…??? Looks like he did! Tom Brady effectively “pump faked” retirement (see what I did there) as his last NFL move but finally made an official retirement announcement after a crazy few days of rampant (and a little bit ridiculous) media fueled speculation. 
• Not always liked (mainly because most Americans love an underdog), but always respected with arguably the most successful NFL career of all time. 22 years in the NFL, started in 10 Super Bowls, won 7, and named Super Bowl MVP 5 times. He holds an amazing 40 NFL statistical records – by far the most of any player in NFL history. CBS Sports has a great summary called Tom Brady by the Numbers.
• OH C’MON MAN – While much of the U.S. is dealing with a brutal winter storm, Punxsutawney Phil saw his shadow this week at the annual Groundhog Day celebration at Gobblers Knob which means he is predicting six more weeks of winter – NOOOOO!!!!! Ah but don’t fret too much my friends… Turns out he really sucks at his job as a nationally recognized weather forecasting rodent with only about a 39% accuracy rate per the Stormfax Almanac.  WHEW – that was close!!!!!! 😊
• And finally some Dad jokes (you can stop scrolling down now – LOL):
• Random Dad thought - If you clean out the vacuum cleaner, you actually become the vacuum cleaner….
• Ever wonder how many vampires have been run over by people backing up and only using their mirrors???
• When doing exercise squats, are your knees supposed to sound like an old goat chewing on an aluminum can stuffed with celery (asking for a friend)???
• Aunt Patty and I tried to start a balloon company once, but we couldn’t keep up with inflation – LOL!!!!!!

Have a GREAT weekend and please stay safe!!!

Uncle Sean

Sometimes known as Sean Mayo – contact Sean directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis

FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.