Weekly FinTech Digest | Week 8

Quick Intro

Every week on Friday I am publishing a Weekly FinTech Digest, where I am covering the hottest stories that happened in the financial (technology) space over the week, what I have read and what you should not miss too.

If you are as passionate and curious about FinTech as I am and always want to stay updated, hit the follow button and let's learn & grow together.

This was another interesting week in FinTech, and these were the hottest stories.

Alphabet and Salesforce Back $75 million Funding for UK Online Payments Start-up GoCardless

British online payments start-up GoCardless has secured a $75 million investment backed by U.S. tech giants Alphabet and Salesforce.

The funding round was co-led by Alphabet's venture arm GV and private equity firm Adams Street Partners. Existing investors Accel, Balderton Capital, Notion Capital and Passion Capital also contributed.

London-based GoCardless processes direct debit payments on behalf of businesses. The firm's clients include newspapers like The Guardian and the Financial Times, as well as tech firms like Box and Sage. It says it now processes payments for more than 40,000 merchants, handling more than $10 billion worth of transactions every year.

GoCardless was set up in 2011 by Hiroki Takeuchi and fellow entrepreneurs Tom Blomfield and Matt Robinson. Blomfield departed to create mobile bank Monzo, while Robinson left to start up digital estate agent Nested.

The fresh capital will be used to help the company expand its payments product to the United States, Takeuchi said, with a view to cover about 70 percent of recurring payment volume globally by the spring. It currently only has offices in Europe and Australia.

SME Lender Iwoca Raises £150 million

UK small business lender iwoca has raised £150 million in equity and debt capital, including figures from a recent Series D equity round led by Augmentum Fintech.

The company, which reached profitability in 2018, says the capital raise will enable it to continue recruiting new customers across its main markets in the UK, Germany and Poland. Thus far, the FinTech firm has funded more than 25,000 small businesses across Europe. 

Mambu Raises $34M for Expansion of Banking Platform

Mambu, a Berlin-based FinTech, raised $34 million in a funding round led by U.S. investment firm Bessemer Venture Partners. Action Capital, CommerzVentures, Point Nine Capital and Runa Capital participated in the round.

Mambu provides cloud-based software to legacy banks, startup FinTechs and others to help them expand lending and full-service banking to mobile customers. The startup will use the funding to invest in its technology platform and will also grow its sales and support staff.

Microsoft's M12 Fund Invests in Payments Fraud Specialist nsKnox

NsKnox, a startup offering companies real-time payments fraud protection, has raised $15 million in a Series A funding round led by Microsoft's venture fund and Viola Ventures and joined by Israel Discount Bank.

Israel and Boston-based nsKnox's answer offers a real-time corporate payment protection platform designed to defend users against cyber-fraud, internal fraud, social engineering and data manipulation attempts throughout the journey of the payment.

The technology allows organisations to validate payment authenticity, verify sender and receiver, and identify and prevent manipulations. The startup says it is forging partnerships with top financial institutions around the world and will use the new funding to push its go-to-market strategy.

Adyen Launches Open Banking-Powered Payment Method

Dutch payments giant Adyen has launched a new, open banking-powered, alternative to card transactions.

Taking advantage of the EU's PSD2 requirement for banks to create APIs that let third parties initiate payments on behalf of consumers, Adyen has plugged into the UK's biggest account providers. Other European countries are expected to follow.

Open banking payments are authenticated directly between consumers and their banks, hence, unlike with direct debits, merchants can avoid chargebacks generated due to fraud or an inability to capture funds.

Customers select the payment type during the checkout process, at which point they are redirected to their bank’s online environment to securely confirm the transaction. Adyen handles the payment flow between the bank and the merchant. 

The company says that its new offering can slash processing costs for higher transaction values and, because open banking offers real-time credit transfers, the payments are guaranteed, enabling merchants to ship products immediately.

Metro, Starling and ClearBank Won £280 million from RBS

Metro, Starling and ClearBank have been awarded a combined £280 million from the RBS bail out fund, beating off competition from better-known brands like TSB, Nationwide and CYBG and rival challenger Monzo.

The awards from the Capability and Innovation Fund Pool A is designed to promote competition in the market for banking services to SMEs in the United Kingdom. It forms part of a £750 million package of grants demanded under EU rules for the state-aided bail out of RBS during the 2008 financial crisis.

Metro Bank was granted the largest slice of the pie at £120 million, followed by Starling at £100 million. ClearBank, which is collaborating with SME banking startup Tide, walked away with £60 million. 

BNP Paribas Fortis Launches Multi-bank Account Aggregation App

BNP Paribas Fortis* has added real-time account aggregation from multiple providers to its Easy Banking app, giving customers a single overview of their various bank accounts on one screen.

Developed in partnership with Swedish PFM platform Tink, the tool currently covers accounts held in Belgium with Belfius, ING and KBC. 

In the next few months, it will expand to cover other banks and will add functions such as payment initiation and money tracking and goal-setting PFM features.

Mizuho Bank Finalizes Support of AliPay and UnionPay for J-Coin Launch

Mizuho Bank soon to launch its new digital currency platform J-Coin Pay on 1 March with the support of 60 regional financial institutions. To make use of the currency, users will download a dedicated app on their smartphone. Payments will be made using QR codes.

The value of the digital currency will be fixed at 1 yen per unit, and will not fluctuate on the market, as virtual currencies such as Bitcoin do.

Merchants who support acceptance of the coin will be charged fees significantly lower than for credit card payments in a quest to stimulate adoption and uptake. The bank has listed a range of affiliated stores to participate in the launch, from retail department outlets to restaurant chains and service industries, including transit networks and ride-hailing taxi operators.

In confirming the launch date, Mizuho has expanded on its future plans for the new currency. Chief among these is a partnership with Alipay and UnionPay to incorporate J-Coin Pay into their QR code-based apps for use by non-Japanese customers visiting the country. The bank is also exploring the B2C possibilities for J-Coin Pay by enabling transfers between corporate clients and individual customers, such as expense accounting and salary payment. 

In a statement, the bank says: We will expand our bank digital currency platform to provide a wide range of financial services.

*BNP Paribas Fortis is an international bank based in Belgium and is a subsidiary of BNP Paribas. It was formerly, together with Fortis Bank Nederland, the banking arm of the financial institution Fortis. 

Follow my Weekly Blockchain & Crypto Digest if you haven't yet! There I'm covering the hottest stories and latest development in the Crypto/Blockchain space.

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

👉 Lithuania's 10 Years Challenge - from Developing Country to European FinTech Hub

👉 7 Facts about Bitcoin You Should Know

👉 Forget Bitcoin - Cannabis is the New Crypto

👉 Crypto is NOT a Bubble. Never was, and hardly ever will be

👉 Investors won't see Bitcoin ETFs any time soon. Here's why

👉 All you need to know about Bitcoin ETFs now

👉 Bitcoin is NOT a Currency, and Never Will Be

***

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 one of the leading alternative banking and payments providers in EEA, I'm an active member of FinTech community and a TechFin evangelist.

If you've enjoyed this piece, don't hesitate to press like, comment what you think and share the article with others. Let's spread the knowledge together!

For more, follow me on LinkedIn & Instagram. I'm building the best community the social world has ever seen! 🔥🚀