Posted In:

BNPL, Payments, Apple


#441
Imitation Is The Highest Form Of Flattery

Published:

Jun 11, 2022


Author:

Cindy Grazer

Posted In:

BNPL, Payments, Apple

Published:

Jun 11, 2022


Author:

Cindy Grazer


Share:

The latest news on the BNPL battlefield this week is bound to have left the incumbents shaking in their boots. The announcement of “Apple Pay Later” brings new heights to an already saturated space, but despite being late to game, the newest threat stems from among the most formidable veterans.

Having spent years working its way into the digital payments ecosystem, from tap-to-pay to the Apple credit card, Apple’s foray into the $125 billion BNPL market helps the giant both diversify and consolidate its foothold in the world of consumer finance.

With over 1 billion iPhones in circulation worldwide, ApplePay Later is poised to take on specialists like Klarna and Affirm who are already experiencing their first setbacks against a backdrop of rising inflation, higher interest rates and slowing growth. The 5% drop in Affirm’s stock price post-announcement is a clear testament to this. Unlike its competitors, Apple is also taking on the pay-later risk directly on its balance sheet through a second financial arm and wholly owned subsidiary - Apple Financing LLC - which will also oversee credit checks and loan underwriting.

As the cost of borrowing increases and credit card usage among younger customers drops, Apple’s move is a clear indication that BNPL-style loans are here to stay. While the giant may be taking on some lending risk, the move no doubt will continue to keep users locked into the walled gardens of its ecosystem.

Imitation Is The Highest Form Of Flattery

Portfolio News


01
MoneyLion


Warburg-backed news group Reorg hires bankers for sale - The transaction could value specialist distressed debt and bankruptcy information provider at about $1.5b. Private equity groups have expressed interest in Reorg in recent months, as buyout investors have snapped up lucrative specialist content companies that can charge corporate clients high, recurring subscription fees. Rival data companies have also expressed interest to participate in the auction as they seek to consolidate the industry. Read more

MoneyLion set to join Russell 3000 index - Inclusion in the index will take effect after the U.S. market opens on June 27, 2022. Shares of MoneyLion Class A common stock will be automatically added to the appropriate growth and value style indexes. Read more

Simetrik announces ability to integrate payment methods via APIs - Simetrik, known for their transaction reconciliation platform, has added new functions to allow gateways, payment facilitators, commerce platforms and financial platforms to integrate through APIs. With the boom in e-commerce adoption, the integration or updating of payment methods has become a problem since these processes can take months and require expertise that competes with other core developments. Read more

Imitation Is The Highest Form Of Flattery


Apple to fund pay-later loans off its own balance sheet - Apple announced the Apple Pay Later service this week, offering to split purchases up into four equal payments over six weeks, with zero interest and no fees of any kind. Apple said its treasury department will decide the exact mechanism it will use to fund the loans and funding sources may shift over time. Loans and creditworthiness decisions will be handled by a wholly owned subsidiary, Apple Financing LLC. Read more

Affirm CEO says he’s not worried about Apple’s Pay Later rival - Affirm offers lending plans from six weeks to 60 months, compared with Apple’s plan to split up Apple Pay purchases over four payments across six weeks, Affirm CEO Max Levchin said. The Apple service “creates a really nice tailwind for us” by informing more people about buy now, pay later services, he said. Read more

Industry News


Salesforce takes crypto plunge with new NFT cloud - The company’s goal with this product is to make NFT selling more accessible. Salesforce is seeing interest from CMOs and CDOs who are asking for help entering web3, and the company is enthusiastic about bringing new innovations, products and offerings to its customers in a way that allows them to build and maintain meaningful relationships. Read more

Checkout.com starts accepting stablecoins in major crypto push - The $40b start-up, which competes with the likes of PayPal and Stripe, said this week it is launching a feature that allows businesses to accept and make payments in USD Coin, a popular stablecoin that’s pegged to the U.S. dollar. Checkout.com said it is offering the new payment method through a partnership with Fireblocks, a crypto security firm. Read more

Driven round the bend by cashless parking - Coin-fed meters are largely a thing of the past due to the general decline of cash (and the cost of handling it) but even machines that take card and contactless payments are expensive to service and maintain. And what if drivers don’t have a smartphone, or are not “digital natives”? Read more

SEC closes in on rules that could reshape how stock market operates - Chairman Gary Gensler directed SEC staff last year to explore ways to make the stock market more efficient for small investors and public companies. While aspects of the effort are in varying stages of development, one idea that has gained traction is to require brokerages to send most individual investors’ orders to be routed into auctions where trading firms compete to execute them. Read more

Citadel Securities, Virtu build crypto plan with brokerages - The market makers are developing a crypto offering with help from Fidelity and Charles Schwab that would increase access to digital assets, which could be available late this year or early next. This would be the first big crypto push from Citadel Securities and Virtu, dominant trading firms in traditional markets like equities and exchange traded funds. Other market makers like Jump Trading and Jane Street are already active in crypto with venture investments and trading capabilities. Read more

African payments company makes rare purchase of US fintech company - MFS Africa, a digital payments company, is to acquire Oklahoma-based Global Technology Partners in what it described as a rare case of an African group doing a tech deal in the US. The acquisition, which will allow MFS to issue prepaid cards to clients, marks a further evolution of Africa’s rapidly growing fintech scene. Read more

PayPal mounts crypto offensive after New York grants a full license - PayPal will let users transfer certain cryptocurrencies to other customers, exchanges and external wallets, a new service that’s part of the company’s effort to boost usage of its app. The company also said the New York Department of Financial Services granted PayPal a “BitLicense,” which governs businesses working with virtual currencies. PayPal said it was the first company to convert a conditional BitLicense into a full one. Read more

New Stripe tool aims to improve EU payment authentications - Stripe added new tools to its payments toolbox in Europe Monday, launching a new delegated authentication feature that supports biometric verification methods directly in the customer checkout flow. The feature could reduce friction and improve conversion while also complying with the EU’s Strong Customer Authentication (SCA) regulation, which requires two-factor authentication for credit card payments to reduce fraud. Read more

Bipartisan crypto regulatory overhaul would treat most digital assets as commodities under CFTC oversight - Senators Cynthia Lummis and Kirsten Gillibrand introduced legislation this week to create a regulatory framework for the crypto markets, which would classify the vast majority of digital assets as commodities. Aides to Gillibrand and Lummis said their proposed law treats all digitals assets as “ancillary” unless they behave like a security a corporation would issue to investors to build capital. Read more

Banks and tech giants are losing skilled staff to flexible fintech startups - Bankers, engineers, data scientists and sales staff from Wall Street, the City of London and Silicon Valley are among those joining an exodus that picked up speed during the pandemic, according to data compiled by Revelio Labs, a workplace intelligence company. The growth in highly qualified staff switching to roles in new sectors comes as tight job markets allow many tech employees to change jobs, seeking higher salaries and more flexible routines. Read more

Ant Group launches digital bank in Singapore - Named Anext Bank, it will target small and medium enterprises (SMEs), it said in a statement this week. It has also formed a partnership with trading platform Proxtera to provide financial solutions for SMEs looking to participate in overseas trade. Read more

Argentina approves Ualá’s purchase of Eurnekian’s Wilobank - Argentina’s central bank has approved fintech Ualá’s purchase of billionaire Eduardo Eurnekian’s digital bank Wilobank. Read more

Mastercard to secure Mercado Libre crypto ecosystem in Brazil - Mastercard has partnered with Mercado Libre to strengthen the security and transparency of its recently launched crypto program in Brazil. Read more

Select Financings



Backbase - Amsterdam based maker of banking engagement software raised €120m in growth funding led by Motive Partners. Read more

Branch - Ohio based insurtech company raised $150m in Series C funding led by Weatherford Capital. Read more

BUD - London based open banking company raised $80m in Series B funding led by an affiliate of TDR Capital. Read more

Codat - London based software company connecting small businesses with financial institutions raised $100m in Series C funding led by JPMorgan Chase's growth-equity arm. Read more

Cred - Bengaluru based credit card payment platform raised $80m in Series F funding led by GIC. Read more

Cryptio - Paris based crypto accounting and reporting platform raised $10m in Series A funding led by Point Nine. Read more

Defacto - Paris based B2B lending platform for SMEs raised €15m in Series A funding led by Northzone. Read more

Delphia - New York City based algo-adviser raised $60m in Series A funding led by Multicoin Capital. Read more

Euler - UK based DeFi lending protocol raised $32m in new funding led by Haun Ventures. Read more

Entropy - New York based decentralized crypto custodian raised $25m in Seed funding led by Andreessen. Read more

Finch - San Francisco based maker of APIs for HR systems raised $15m in Series A funding led by Menlo Ventures. Read more

Fruitful - New York based financial wellness company raised $25m in Series A funding led by Emigrant Bank. Read more

Geode Finance - London based liquid staking solution for DAOs raised $3m in Seed funding led by Multicoin Capital. Read more

Ivella - Santa Monica based couples banking platform raised $3.5m in Seed funding led by Anthemis. Read more

Juni - Sweden based e-commerce-focused neobank raised $100m in Series B funding led by Mubadala Capital. Read more

Klar - Mexico City based digital bank raised $70m in Series C funding led by General Atlantic. Read more

Klasha - Nigeria based cross-border commerce startup raised $2.1m in Seed funding led by AMEX Ventures. Read more

Kushki - Ecuador based payments infrastructure company raised $100m in Series B funding led by Kaszek Ventures. Read more

Ledgible - Atlanta based crypto tax and accounting company raised $20m in Series A led by EJF Capital. Read more

Mash - Toronto based payments platform for builders, creators, and developers raised $6m in Seed funding led by Castle Island Ventures and Whitecap Venture Partners. Read more

Middesk - San Francisco based business verification and underwriting provider raised $57m in Series B funding led by Insight Partners and Canapi Ventures. Read more

Nava Benefits - New York based employee benefits brokerage raised $40m in Series B funding led by Thrive Capital. Read more

Navigate - Singapore based crypto rewards company raised $7.6m in Seed funding led by Distributed Global. Read more

NymCard - MENA based banking as-a-service company raised $22.5m in growth funding led by DisruptAD. Read more

Pintu - Indonesia based crypto exchange raised $113m in Series B funding led by Intudo Ventures. Read more

Request Finance - Paris based crypto payments startup raised $5.5m in Seed funding led by Balderton Capital and Animoca Brands. Read more

Securesave - Seattle based emergency savings fintech company raised $11m in new funding led by Truist Ventures. Read more

Skolem Technologies - New York based DeFi asset management provider raised $20m in Series A funding led by Galaxy Digital. Read more

Summer - New York based financing startup for second homes raised $13.4m in Seed funding led by QED Investors and Lightspeed Venture Partners. Read more

Trovata - San Diego based cash management automation company raised $27m in Series B funding led by Fin Capital. Read more

Vanta - San Francisco based enterprise data security compliance startup raised $100m in Series B funding led by Craft Ventures. Read more

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