#519
Tackling Giants
Published:
Dec 18, 2023
Author:
Sarah Parsons Wolter
Share:
In a decisive move, British regulators are taking a stand against Visa and Mastercard by proposing a cap on card fees. This step aims to protect UK businesses, which have been grappling with increased charges since Brexit. The Payment Systems Regulator (“PSR”) is making headlines with its plan to reinstate the pre-Brexit cap on interchange fees for cross-border and online credit and debit card payments.
Visa and Mastercard had sharply increased their fees on transactions between the UK and the European Economic Area after the UK's departure from the EU. This spike in fees has led to UK businesses paying between £150m to £200m extra annually. In a notable turn, the regulator has proposed recapping the cross border fees at the lower levels set by the EU in 2015, reflecting the urgency to address the burden on companies and the potential impact on consumer prices.
As the debate heats up, Visa and Mastercard defend their heightened fees, citing the risks and complexities inherent in cross-border transactions. The proposed fee cap may prompt these networks to seek alternative ways to recuperate their lost revenue, potentially limiting cashback or loyalty points or introducing new charges for credit card users.
This move is part of a broader push in the UK to challenge the dominance of existing payment networks and encourage the development of more efficient systems. Observing the successful cases of systems like Pix in Brazil and UPI in India raises the question: Can the UK draw inspiration from these emerging market models to revolutionize its payment system? Or will they continue tackling giants?
Portfolio News
Simetrik gains entry to the exclusive Endeavor network of entrepreneurs - Endeavor Colombia announced this Wednesday that Simetrik, a “No-Code” tool for the automation of financial control, joined its network. Read more
Next Big Shop publishes insights into Black Friday data - In their latest report, Next Big Shop unpacks the standout categories, brands, and trends that made a splash in the biggest shopping event of the year. Read more
GoGoPool announces Pandasia launch, $GGP token airdrop - GoGo Pool launched the first version of Pandasia, a new platform to help subnets grow by airdropping to registered Avalanche Validators. GoGoPool also announced their airdrop for the $GGP token going live. Read more
Uniswap X closes in on $1b trade volume - Uniswap X achieved a significant milestone with its trading volume surpassing $1 billion just four months after its launch. Read more
Rainbow Wallet Points Frenzy Positions Startup As MetaMask Killer - Cryptocurrency wallet Rainbow made waves this week with the launch of its new rewards initiative called “Rainbow Points.” On December 12th, Rainbow announced that they had taken a snapshot of all Ethereum blockchain activity and allocated points to Ethereum users based on factors like their wallet balances and usage of decentralized apps and services. Read more
Flutterwave Hires World-Class Executives - Africa's leading payments technology company, is excited to announce the appointment of several seasoned leaders from prominent financial services companies, including PayPal, Stripe, American Express, First Data, Western Union, and Square. Read more
Tackling Giants
UK watchdog proposes cap on card fees in blow to Visa and Mastercard - British regulators plan to reintroduce a cap on card fees imposed on transactions between the UK and EU, in a blow to the Visa and Mastercard duopoly that raised charges on businesses more than fivefold since Brexit. Read more
PSR provisionally proposes to cap cross-border interchange fees on credit and debit cards to protect UK businesses - The Payment Systems Regulator (PSR) has published the interim report for its market review into cross-border interchange fees. It is now seeking views on its provisional findings and proposed approach to remedies to help inform the final report. Read more
Industry News
Europe and Israel’s startup founder factories - 1,451 tech-enabled startups were founded by former employees of 248 European and Israeli unicorns. Read more
How Microsoft’s multibillion-dollar alliance with OpenAI really works - Neither Microsoft nor OpenAI’s other backers — which include Thrive Capital and Sequoia Capital — own any conventional equity shareholding in the company. Instead, they are entitled to receive a share of its profits from a specific subsidiary of OpenAI, up to a certain limit. Read more
Crackdown-hit crypto industry sets sights on Abu Dhabi - Abu Dhabi is becoming a popular destination for crypto companies seeking eager investors and friendlier regulators, at a time when major markets like the US are experiencing an absence of both. Read more
Coinbase uses Base to build digital asset platform for TradFi institutions - Coinbase and its asset management arm teamed up to launch Project Diamond, a smart contract platform that allows institutions to trade and create new digital assets. Read more
$4.7b European fintech firm Pleo appoints new CFO, pointing to IPO hopes - Danish fintech firm Pleo has appointed Soren Westh Lonning, a financial services executive with more than 20 years at companies such as Danish bioscience firm Chr Hansen, hearing aid company WS Audiology, and Danish Endurance, a sports and outdoor clothing startup. Read more
Sale of Silicon Valley Bank’s old venture capital arm hits a snag - Two front-runners had been vying for SVB Capital: a duo of Anthony Scaramucci’s SkyBridge Capital and Atlas Merchant Capital, and San Francisco private-equity firm Vector Capital. Read more
Select Financings
Andalusia Labs - Abu Dhabi based digital asset risk infrastructure company raised $48m in Series A funding led by Lightspeed Venture Partners. Read more
Aria - France based B2B payments and lending company raised €15m in Series A funding led by 13books Capital. Read more
Aye Finance - India based digital lending platform to small companies raised $37m in Series F funding led by British International Investment. Read more
Cents - Italy based software for businesses to integrate ESG frameworks raised €1.2m in pre-Seed funding led by SICI. Read more
Comun - New York based neobank for Latino immigrants raised $4.5m in funding led by Costanoa Ventures. Read more
Copia Global - Kenya based e-commerce startup raised $20m in Series C funding led by Enza Capital. Read more
CurbWaste - New York based SaaS platform that empowers waste services companies to manage their operations raised $10m in Series A funding. Read more
Dynamic Labs - Decentralized developer of non-custodial embeddable wallet tools raised $16.5m in Series A funding led by a16z. Read more
GFO-X - London based crypto derivatives exchange raised $30m in new funding led by M&G Investments. Read more
Hyperplane - San Francisco based developer of customer behavior models for banks raised $6m in new funding led by Lachy Groom. Read more
Kapital - Mexico based bank and technology platform raised $40m in Series B funding led by Tribe Capital. Read more
Lendo - Saudi Arabia based debt crowdfunding marketplace raised $28m in Series B funding led by Sanabil Investments. Read more
Lolli - New York based bitcoin and cashback rewards company raised $8m in Series B funding led by Bitkraft Ventures. Read more
Maka - Nigeria based fashion and beauty e-commerce platform raised a $2.65m pre-seed round led by 4DX Ventures. Read more
Meniga - London based digital bank raised €15m in Series D funding led by Groupe BPCE. Read more
NodeKit - Distributed developer of a shared sequencer L1 built on an Avalanche Subnet raised $1.2m in pre-Seed funding led by Borderless Capital. Read more
Nonco - Distributed digital asset brokerage firm raised $10m in new funding led by Valor Capital Group. Read more
Pave Bank - Singapore based multi-asset regulated commercial bank raised $5.2m in Seed funding led by 468 Capital. Read more
Paynest - Lisbon based financial well-being platform raised €2m in Seed funding led by Lince Capital. Read more
Pivot - France based procurement and spend management startup raised €20m in Series A funding led by Visionaries. Read more
Prevu - New York based online real estate platform raised $6m in Series A funding led by Citi. Read more
Qogita - Netherlands based wholesale procurement platform for retailers in the health and beauty sectors raised €80m in Series B funding led by Dawn Capital. Read more
Stairs Financial - New York based mortgage marketplace raised $3.5m in seed funding led by Zigg Capital. Read more
Udaan - India based B2B e-commerce company raised $340m in Series E funding led by M&G. Read more
Yoii - Japan based revenue-based financing platform completed a $5.5m in Series A funding led by Emellience Partners. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Monday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.