Klarna goes Open Banking 👀; Apple’s plan to dominate Finance 📲; Some fail Fast while others go BIG - Bolt acquires Wyre for $1.5B 🤯

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1. Adyen is an underrated FinTech Giant. But that might change soon 👀
2. Stripe’s Fast fails too fast? It was just too fast & too luxurious 🤷♂️
3. Current taps DeFi in a bid that hybrid is the future of finance 💸
4. Microsoft & Finastra’s BaaS Partnership signifies what the future of Lending is 🏦

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April was a massively hot month in FinTech. We will look at Klarna trying to shake up the Open Banking market; Apple’s plan to dominate the world of Finance; some fail Fast while others go BIG - Bolt acquires Wyre for $1.5B, and other interesting news and developments.

Without further ado, let us dive into what has happened in the financial technology sector over the last month. Let’s connect the dots.

Klarna goes Open Banking 👀

The (breaking) news 🗞 Buy Now, Pay Later (BNPL) giant Klarna has set up an Open Banking sub-brand and a business unit called Klarna Kosma, aimed at helping firms connect to its network of thousands of banks across Europe and the US.

More about this 👉 Klarna Kosma promises to provide financial institutions, FinTechs, and merchants with the connectivity to build financial services apps and services by providing simple and secure access to 15,000 banks in 24 countries through a single API. These companies can now leverage Klarna’s API to access account statements, initiate payments, and fetch banking information, among other things.

Since 2014 👀 One must note that Klarna first entered the open banking space when it acquired Sofort, a direct bank-to-bank payment service in Germany, in 2014. Since then the Swedish giant has developed the service, expanding it into two dozen markets, and begun to use open banking to power additional in-house services.

✈️ THE TAKEAWAY

This is huge. First and foremost, it’s clear that Klarna is following both the money and the trends, and all have been increasingly in favor of Open Banking (OB). The global OB market was expected to grow from $11.79B in 2020 to $15.13B in 2021 at a compound annual growth rate (CAGR) of 28.4%, as per various reports. Although there’s no recent data, Visa snapping Tink and Apple buying Credit Kudos just last week clearly show that both the stakes and the interests are very high here. Furthermore, it must be noted that in addition to Account Information Service (AIS), Klarna Kosma customers can also programmatically initiate payments with compatible banks, and that has always been the ultimate long-term promise of OB. If this takes off, it could potentially replace card payments or e-wallets like PayPal, Venmo, among others. The giants - including Klarna - understand that and definitely want to have a product ready if/when we get there. Finally, it further adds to Klarna’s ultimate FinTech or Super App strategy. It’s no longer a BNPL player (though it’s very strong there) only, it’s a FinTech giant to be reckoned with.

Apple’s Breakout plan to dominate the world of Finance 📲

Breaking news 📣 Tech behemoth Apple is working to bring a host of financial services work, including payments processing, in-house to reduce its reliance on outside fintech partners, according to Bloomberg.

More on this 👉 The tech giant has embarked on a multi-year plan, called 'Breakout', that would see it do payments processing, loan risk assessments, fraud analysis, credit checks, and customer service work on its own, says Bloomberg, citing sources.

The Breakout project is focused on future products, suggesting that Apple is planning on diving deeper into the financial services sphere.

✈️ THE TAKEAWAY

Big news. For Apple. After quietly acquiring UK Open Banking startup Credit Kudos just last week, this news is a further building block for the Apple Finance empire showing the tech titan is seriously planning on diving deeper into the financial services sphere. Apple already offers peer-to-peer payments, its Wallet app, a credit card, and the ability for merchants to accept payments from an iPhone (a softPOS solution). It is rumored to be adding a subscription service for its hardware as well as a BNPL product, which Bloomberg reports could use in-house technology. If this goes into execution, Apple will undoubtedly soon become a major player in Finance. Despite Meta (with its stablecoin Diem) and Google (with checking accounts) having failed in this domain, Apple is one of very few tech giants (another one is Amazon) that could really make this work.

Some fail Fast while others go BIG - Bolt acquires Wyre for $1.5B 🤯

The scoop 💸 Payments decacorn Bolt (last valued at a whopping $11 billion) has acquired blockchain infrastructure provider Wyre for a reported $1.5 billion.

Given the reported price tag is true, this would make it one of the largest crypto acquisitions that did not involve a special purpose acquisition company (SPAC). Not too shabby!

The USPs 🥊 Founded in 2014, Bolt provides online retailers with a one-click checkout, authentication, payments, and fraud protection offering. In other words, it’s like Fast but with more sales. By the way, check out my latest on Fast in case you missed it:

Too fast, too luxurious: lessons from the failure of Stripe-backed Fast

Wyre was founded in 2013 and it offers several API solutions, including the ability to buy, sell, and hold cryptocurrencies, bank-supported crypto-to-fiat exchange, and crypto compliance services.

So what does this tell us? Well, first, when some fail - others go bigger. But there’s more to that, so here’s the takeaway:

✈️ THE TAKEAWAY

Standing out in a crowded market. First and foremost, this acquisition is part of the bigger trend we have been seeing in FinTech for quite some time now - traditional payments companies are increasingly adding crypto solutions and vice versa. The lines between crypto and TradFi are hence getting more and more blurred. Now, when it comes to Bolt, the Wyre buy simply means that crypto capabilities will be integrated into the one-click-checkout APIs. This is important because (a) it will enable Bolt merchants to accept crypto payments and hence make Bolt attractive for a bigger set of users, (b) the company said it will enable customers to purchase cryptos and NFTs via Bolt, hence, extending the company’s use cases beyond just one-click checkout, and (c) use Wyre’s tech stack to introduce to (probably crypto-first) offerings that would help drive merchant acquisition and diversify its business. Zooming out, this is all about diversification and differentiation in a highly competitive and crowded payments market. Even with Fast no longer on the market, Bolt still is left to compete with payment titans like PayPal, Apple Pay, Amazon Pay, etc. which all have strong adoption and huge market share.

Extra Reads & Quick Bites for Curious Minds🧠

• NuPay🇧🇷 Brasil-based Nubank has launched NuPay, an online payment solution for e-commerce sites using the digital bank's application. NuPay allows payment via account debit or interest-free instalments on the card. Additional credit card limits will be offered, without the need for the person to fill in data or previously contract the service. According to Nubank this new feature will encourage more e-commerce because almost 50% of people give up completing an online purchase due to bureaucratic procedures and fear of sharing card data.
• Amazon power 💳 Amazon is staying with JPMorgan Chase as an issuer of its Prime credit card after considering a switch to American Express, CNBC reported. American Express and Synchrony were in contention to fill the gap if JPMorgan was ditched while Mastercard maneuvered to displace Visa as the payments network, sources told the news outlet. As a result of months of negotiations, Amazon’s decision allows JPMorgan Chase to issue the tech giant’s flagship rewards credit card. Like Walmart, Amazon has a reputation for driving hard bargains with partners. Amazon succeeded in convincing potential credit card issuers to accept their terms.

Money Moves💸

• Yonder, a London-based credit card startup catering to expats in the UK, has opened a waitlist for prospective customers after emerging from stealth with a £20M equity raise.
• Fintech Datanomik has raised a $6M seed round to advance its mission to bring financial data access to businesses across Latin America and emerging markets, according to latamfintech.co. 
• Lemon.markets, a Berlin-based startup that helps firms embed trading services via APIs, has raised €15M in a seed funding round co-led by Lakestar and Lightspeed.

Continue reading by subscribing to Linas's Newsletter. You will receive fresh news about FinTech with hot takeaways every day.

P.S. You might enjoy my earlier pieces as well:

👉 Bitcoin in 2021: a story in 5 graphs, and what might come in 2022

👉 A Wise pitch deck that led to London’s biggest and most successful direct listing ever

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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