S&P Global Buys IHS Markit to Create Data Giant; Stripe's Going After All Things FinTech; Affirm Expands Canadian Presence w $264M PayBright Buy

Hey, 👋 fellow FinTechers! Hope you are all keeping well and safe during these difficult times. What a week it was... This is the best Weekly Digest yet!

P.S. Before we dive into what happened in FinTech last week, check out my Connecting the Dots Newsletter, where you will get much more. Every Friday👇🏼

Last week (30 November - 4 December) was a super hot and interesting one in FinTech this year. Stripe undoubtedly won the spotlight this week revealing again that they are going after all things FinTech. S&P Global has acquired IHS Markit for $44B creating a market data powerhouse and making it the biggest corporate acquisition this year, and more exciting developments and insights (from Revolut, Monzo, and others).

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

S&P Global Acquires IHS Markit to Create Market Data Powerhouse

S&P Global is buying IHS Markit to boost its data analytics capabilities, further consolidating the space to a few market data giants. However, EU and US antitrust concerns may delay the acquisition.

S&P Global has agreed to buy IHS Markit for $44 billion, making it the biggest corporate acquisition of the year, according to Reuters.

The transaction will now be subject to regulatory approval in the US and EU. Data giant S&P Global offers credit ratings, benchmarks, and analytics in the global capital and commodity markets, while IHS Markit delivers financial analytics in the debt market and derivatives, as well as other sectors such as transportation, agriculture, and aerospace.

The combination of S&P Global's and IHS Markit's complementary products will drive revenues and help them explore high growth opportunities, such as alternative data.

THE TAKEAWAY

Data is always a competitive advantage. This mega-deal yet again emphasizes the importance of big data for financial markets. S&P Global stock is at an all-time high because investors know Wall Street is willing to pay up big for those insights.

Stripe Capital Extends Business Lending To Online Platforms

Stripe Capital is now available for platforms. US-based customers can leverage Stripe’s lending API to provide their customers with access to fast and flexible financing.

Payments giant Stripe is taking Stripe Capital, its push into online business finance and lending, to the next level.

Stripe Capital was first introduced in September 2019, offering customers and businesses financing options through its online platform.

On Tuesday this week, Stripe went live with the next phase in its business lending campaign, which enables online platforms to offer financing to their business customers through Stripe Capital.

In particular, Stripe Capital noted it equips platforms with an “end-to-end lending API” through which they can provide financing options. That enables platforms to offer an additional service for online merchants in need of a quick infusion of cash or some working capital without having to build their own lending solution.

The new feature is already being utilized by Jobber, which provides home service management software, and Lightspeed, a point-of-sale and eCommerce platform.

THE TAKEAWAY

Stripe is going after all things FinTech. While legacy banks are not interested in lending to SMEs, Stripe is looking to step into that void, with rapid lending decisions based on data culled from a customer’s past performance on the platform. And this might be just the beginning.

Stripe Goes Into Banking-as-a-Service

Stripe has brought in several big-name banks to back its new banking-as-a-service API that lets online businesses embed financial services in their platforms.

Stripe strikes again. Stripe Treasury promises to make it easy for firms to send, receive, and store funds, slashing the red tape associated with opening business bank accounts.

E-commerce marketplace Shopify is taking advantage of the API, working with Stripe and Evolve Bank to offer its merchants a business account built specifically for them.

Shopify merchants will be offered interest-earning accounts eligible for FDIC insurance in minutes. Customers can get near-instant access to revenue earned through Stripe, spend this directly from their balance with a dedicated card, transfer it via ACH or wire transfer, and pay bills.

Stripe says more functionality will come next year, in part thanks to a US partnership with Goldman Sachs. Meanwhile, Citibank and Barclays are onboard as global expansion partners.

THE TAKEAWAY

Stripe is building the ultimate API for the digital economy. Treasury marks a significant milestone in Stripe's journey from e-commerce payments player to one-stop-shop for the internet's financial services' needs. Stripe is coming for your FinTech business next door.

Affirm Expands Canadian Presence With $264M PayBright Buy

US Affirm has entered into a definitive agreement to acquire PayBright, one of Canada’s leading buy-now-pay-later providers.

According to the press release, under the terms of the agreement, Affirm will acquire PayBright for total cash and equity consideration of approximately $264 million. Additional terms of the transaction were not disclosed.

The partnership between Affirm and PayBright will unite two innovators with complementary merchant relationships and deeply aligned cultural values, and creates a payment solutions platform with expanded scale and reach.

THE TAKEAWAY

Buy Now, Pay Later (BNPL) is a hot wave in FinTech right now, and Affirm wants to be the leading part of it. With this acquisition, Affirm will have a larger and more diverse merchant network across the US and Canada. Further, PayBright’s first-mover advantage in Canada provides Affirm the opportunity to continue to expand and grow.

Extra Reads & Quick Bites for Curious Minds🧠:

• Belgium-headquartered payments solution provider SWIFT is introducing a new service for real-time cross-border payments and transfers called GPI Instant.
• Walmart-owned Indian eCommerce business Flipkart is planning to sell off a percentage of its digital payments division PhonePe in an effort to facilitate funding for expansion. Flipkart will retain a majority stake in PhonePe, and the $700 million fundraise at a $5.5 billion post-money valuation will be led by Walmart and other previous investors.
• South Africa-based Discovery Bank has introduced virtual cards and the Discovery Pay contactless payment service.

Quote of the Week/🧠Food for Thought🧠

Are you ready for it? 🤔

Graph of the Week

Thanksgiving Day e-commerce sales grew 21.5% year over year (YoY), reaching $5.1 billion.

Week in Brief

S&P Global is buying IHS Markit to boost its data analytics capabilities, further consolidating the space to a few market data giants. However, EU and US antitrust concerns may delay the acquisition.

Stripe Capital is now available for platforms. US-based customers can leverage Stripe’s lending API to provide their customers with access to fast and flexible financing.

Stripe has brought in several big-name banks to back its new banking-as-a-service API that lets online businesses embed financial services in their platforms.

US Affirm has entered into a definitive agreement to acquire PayBright, one of Canada’s leading buy-now-pay-later providers.

Continue reading by subscribing to Connecting the Dots Newsletter. You will receive fresh news about FinTech with hot takeaways every Friday.

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

👉 These are the Best Performing Stocks of the Last Decade

👉 Welcome to the Google Bank - Your Everyday Banking from Google, NOT a Bank.

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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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