Архив рубрики: Finance

Revolut expands bank account aggregation to Ireland

Fintech startup Revolut has expanded its open banking feature to Ireland. The feature first launched in the U.K. back in February. Once again, the startup is partnering with TrueLayer to let you add third-party bank accounts to your Revolut account.
The feature launch also marks the launch of TrueLayer in Ireland. For now, Revolut users can only link their Revolut account with AIB, Permanent TSB, Ulster Bank and Bank of Ireland. Revolut and TrueLayer will add support to other banks in the future. Revolut currently has 1 million customers in the Republic of Ireland.
The idea behind open banking is quite simple. Many online services rely on application programming interfaces (APIs) to talk to each other. You can connect with your Facebook account on many online services, you can interact with other services from Slack, etc.
Financial institutions have been lagging behind on this front, but it is changing thanks to new regulation and technical updates. With open banking, your bank account should work more like a traditional internet service.
When you connect your bank account with Revolut, you can view your balance and past transactions from a separate tab that lists all your linked accounts. Users can also take advantage of Revolut’s budgeting features with their bank accounts.
As TechCrunch’s Steve O’Hear noted when he first covered Revolut’s open banking feature, Revolut was originally authorized for Account Information Services (AIS) by the U.K. regulator, the Financial Conduct Authority. It lets you access and display information from other financial institutions.
But the startup now has permission to carry out Payment Initiation Services (PIS). It means that you’ll soon be able to initiate transfers from your bank account directly from Revolut. It should make it much easier to top up your Revolut balance, for instance.
While this feature might seem anecdotal, Revolut wants to build a comprehensive financial hub for all your financial needs — a sort of super app for everything related to money. With open banking, you theoretically no longer have to open your traditional banking app.
Image Credits: Revolut

Revolut expands bank account aggregation to Ireland

Challenger bank Bnext revamps rewards for purchases in partner stores

Spanish startup Bnext is revamping its cashback program so that you can buy from partner stores directly from the Bnext app and get some money back. The company has partnered with Button and the feature is available as an open beta.
Traditional cashback portals are a bit clunky. When you find an offer that gives you 2% of your money back, you click on the offer, get redirected to the partner site and hope that your purchase will be registered. A bit later, you get some money back on the cashback website, which you need to cash out to your bank account.
If you’re using Bnext as your bank account, you’ll be able to access rewards directly from your banking app. In addition to that, you don’t get redirected to another site as you purchase goods directly from the Bnext app.
There are multiple levels. If you’re making your first purchase through the feature, you get 1% in savings on average. If you’ve made more than three purchases over the past 30 days, you get 3% in savings on average. In order to reach level 3, you need a premium Bnext subscription. With that level, you get 5% in savings on average.
Partners include AliExpress, Booking.com, eDreams, Europcar, Nike, Just Eat and more. Eventually, the startup wants to let you earn rewards from in-store purchases as well. Bnext is creating a new revenue stream with this feature as the startup will keep a share of the revenue from each transaction.

Bnext provides current accounts and payment cards. You can receive notifications for each transaction with your card, and temporarily lock and unlock your card. You don’t pay any foreign transaction fee as long as you spend less than €2,000 per month with a standard account.
The company has also put together a marketplace of fintech products. You can earn interest by lending money to small companies on October, get a loan, an insurance product and more.
Earlier this year, the startup expanded to Mexico. The company plans to roll out rewards in Mexico soon. Bnext has managed to attract a bit less than 400,000 users.

Challenger bank Bnext revamps rewards for purchases in partner stores

Shine adds invoice insurance to its freelancer bank account

French startup Shine is adding a new option today. If you think there’s a chance that a client is not going to pay your next invoice, you can insure that invoice to avoid any bad surprise.
Shine is building a challenger bank for freelancers and small companies. It lets you send and receive money in a separate business account, pay with a MasterCard, create invoices and stay on top of administrative tasks.
It also helps you get started as the startup can fill out all administrative paperwork to register yourself as a freelancer. You also get notifications to remind you that you should pay your taxes and more. Starting accepting freelancing jobs can be confusing and Shine can help you with that.
Shine has a built-in invoicing tool. It lets you add a client and generate an invoice directly in the mobile app. After that, you can send a link to your client. You get a notification when your client opens the invoice. They can download a PDF and get your bank details to pay you.
And yet, many clients often wait until the last minute to pay an invoice. It can be a month or two after finishing a job, which means that they also forget about outstanding invoices.
In a few weeks, Shine users will be able to create an invoice and insure it before sending it. It costs you 2% of your total amount on your invoice. There’s no subscription fee, it’s a one-off process.
If your client hasn’t paid you after the due date, Shine will reach out to your client again to try to get the payment. If that doesn’t work, you can file a claim with the partner insurance company.
In that case, if the company is still operating, you get paid 100% of your invoice. If the company has collapsed, you get 90% back. (Of course, that’s without taking into account the 2% fees you already paid.)

Shine adds invoice insurance to its freelancer bank account

$75M weed giant Caliva ditches Eaze, launches delivery

It’s a brutal time for marijuana startups. I’m hearing some are raising at 1/5th of their 2019 valuation amidst rampant competition, tall taxes, and slow legalization. The struggles for marijuana’s best-known startup, delivery service Eaze, continue as today it’s losing one of its top partners. $75 million-funded weed brand empire Caliva has dropped Eaze in favor of launching its own delivery system.
By partnering with Hypur banking to solve the marijuana payments legality issue, Caliva will be able to accept contactless mobile payments unlike Eaze that it claims usually requires customers pay in cash. [Update: Eaze claims the majority of payments come via debit cards]. Caliva buyers won’t have to worry about trips to the ATM, especially now during COVID-19 shelter-in-place orders, which the startup expects will boost their average order volume. Combined with verticalizing delivery in-house plus its retail and wholesale operations, Caliva hopes it can grow its margins and survive this long winter for weed startups.

“Our mission at Caliva has always been to provide safe and easy access to plant-based solutions for health, happiness and healing,” said Caliva CEO Dennis O’Malley. “Together with Hypur, we are proud to offer our customers safe, compliant and convenient cashless payment options to improve and modernize their purchasing experience.” It hasn’t been so easy for Eaze, though.
Back in January, we reported that Eaze was in trouble, having suffered unannounced layoffs and executive departures. It burned cash on billboards, and never launched the services of a startup it acquired. There were questions about data security, and weed brands dropped Eaze due to delayed payments. It was almost out of money and in danger of vaporizing. It luckily managed to secure a $15 million bridge round to keep it alive plus a $20 million Series D in February just before the COVID hit the fan, though I dread to think of the terms of that funding.

Troubled Eaze finally closes $35M funding to sell its own cannabis

The plan for Eaze was to verticalize, buying and developing brands that it could sell through its existing delivery service to up its margins. Now it’s seeing former partner Caliva do the reverse, launching a delivery service to sell its own Fun Uncle, Deli, and Caliva brands as well as distribute other vape, edible, and flower brands like Dosist and Kiva. Its menu breadth to attract customers and in-house brands to drive profits could be a winning combo. After limited pilots in SoCal, Caliva delivery is launching in LA and the Bay Area.
Unfortunately, traditional payment processors usually refuse to work with marijuana companies for fear of legal repercussions. That’s why most delivery services can’t accept credit or debit cards, or do so through sketchy legal workarounds that have led payment providers to be sued. Others like CanPay only offer ACH transfers, while Square only works with CBD sellers. “We spent time researching and evaluating all platforms that accept cannabis payments in the U.S., and found that Hypur has the best security, compliance and consumer experience” O’Malley tells me.

400-person Caliva is now trying to raise a Series B, but may experience tough headwinds with shelter-in-place orders in effect in states where marijuana is legal. Stiff taxes on marijuana have meanwhile helped the black market continue to thrive, as California’s $3.1 billion in legal 2019 sales were overshadowed by an estimated $8.7 billion in illegal sales. Faster delivery and simpler payments could help. But enthusiasm for the industry has dwindled following the initial flood of entrants sought to exploit the end of prohibition. Is the Green Rush over?

$75M weed giant Caliva ditches Eaze, launches delivery

Mobile payments firms in India are now scrambling to make money

Vijay Shekhar Sharma, founder and chief executive of India’s most valuable startup, Paytm, posed an existential question in a recent press conference.
“What do you think of the commercial model for digital mobile payments. How do we make money?” Sharma asked Nandan Nilekani, one of the key architects of the Universal Payments Infrastructure that created a digital payments revolution in the country.
It’s the multi-billion-dollar question that scores of local startups and international giants have been scrambling to answer as many of them aggressively shift their focus to serving merchants and building lending products and other financial services .
New Delhi’s abrupt move to invalidate much of the paper bills in the cash-dominated nation in late 2016 sent hundreds of millions of people to cash machines for months to follow.
For a handful of startups such as Paytm and MobiKwik, this cash crunch meant netting tens of millions of new users in a span of a few months.
India then moved to work with a coalition of banks to develop the payments infrastructure that, unlike Paytm and MobiKwik’s earlier system, did not act as an intermediary “mobile wallet” to serve as an intermediary between users and their banks, but facilitated direct transaction between two users’ bank accounts.
Silicon Valley companies quickly took notice. For years, Google and the likes have attempted to change the purchasing behavior of people in many Asian and African markets, where they have amassed hundreds of millions of users.
In Pakistan, for instance, most people still run errands to neighborhood stores when they want to top up credit to make phone calls and access the internet.
With China keeping its doors largely closed for foreign firms, India, where many American giants have already poured billions of dollars to find their next billion users, it was a no-brainer call.
“Unlike China, we have given equal opportunities to both small and large domestic and foreign companies,” said Dilip Asbe, chief executive of NPCI, the payments body behind UPI.
And thus began the race to participate in the grand Indian experiment. Investors have followed suit as well. Indian fintech startups raised $2.74 billion last year, compared to 3.66 billion that their counterparts in China secured, according to research firm CBInsights.
And that bet in a market with more than half a billion internet users has already started to pay off.
“If you look at UPI as a platform, we have never seen growth of this kind before,” Nikhil Kumar, who volunteered at a nonprofit organization to help develop the payments infrastructure, said in an interview.
In October, just three years after its inception, UPI had amassed 100 million users and processed over a billion transactions. It has sustained its growth since, clocking 1.25 billion transactions in March — despite one of the nation’s largest banks going through a meltdown last month.
“It all comes down to the problem it is solving. If you look at the western markets, digital payments have largely been focused on a person sending money to a merchant. UPI does that, but it also enables peer-to-peer payments and across a wide-range of apps. It’s interoperable,” said Kumar, who is now working at a startup called Setu to develop APIs to help small businesses easily accept digital payments.
Vice-president of Google’s Next Billion Users Caesar Sengupta speaks during the launch of the Google “Tez” mobile app for digital payments in New Delhi on September 18, 2017 (Photo: Getty Images via AFP PHOTO / SAJJAD HUSSAIN)
The Google Pay app has amassed over 67 million monthly active users. And the company has found the UPI pipeline so fascinating that it has recommended similar infrastructure to be built in the U.S.
In August, the Federal Reserve proposed to develop a new inter-bank 24×7 real-time gross settlement service that would support faster payments in the country. In November, Google recommended (PDF) that the U.S. Federal Reserve implement a real-time payments platform such as UPI.
“After just three years, the annual run rate of transactions flowing through UPI is about 19% of India’s Gross Domestic Product, including 800 million monthly transactions valued at approximately $19 billion,” wrote Mark Isakowitz, Google’s vice president of Government Affairs and Public Policy.
Paytm itself has amassed more than 150 million users who use it every year to make transactions. Overall, the platform has 300 million mobile wallet accounts and 55 million bank accounts, said Sharma.
Search for a business model
But despite on-boarding more than a hundred million users on their platform, payment firms are struggling to cut their losses — let alone turn a profit.
At an event in Bangalore late last year, Sajith Sivanandan, managing director and business head of Google Pay and Next Billion User Initiatives, said current local rules have forced Google Pay to operate in India without a clear business model.
Mobile payment firms never levied any fee to users as a strategy to expand their reach in the country. A recent directive from the government has now put an end to the cut they were receiving to facilitate UPI transactions between users and merchants.
Google’s Sivanandan urged the local payment bodies to “find ways for payment players to make money” to ensure every stakeholder had incentives to operate.
Paytm, which has raised more than $3 billion to date, reported a loss of $549 million in the financial year ending in March 2019.
The firm, backed by SoftBank and Alibaba, has expanded to several new businesses in recent years, including Paytm Mall, an e-commerce venture, social commerce, financial services arm Paytm Money and a movies and ticketing category.
This year, Paytm has expanded to serve merchants, launching new gadgets such as a stand that displays QR check-out codes that comes with a calculator and a battery pack, a portable speaker that provides voice confirmations of transactions and a point-of-sale machine with built-in scanner and printer.
In an interview with TechCrunch, Sharma said these devices are already garnering impressive demand from merchants. The company is offering these gadgets to them as part of a subscription service that helps it establish a steady flow of revenue.
The firm’s Money arm, which offers lending, insurance and investing services, has amassed over 3 million users. The head of Paytm Money, Pravin Jadhav, resigned from the company this week, a person familiar with the matter said. A Paytm spokeswoman declined to comment. (Indian news outlet Entrackr first reported the development.)
Flipkart’s PhonePe, another major player in India’s payments market, today serves more than 175 million users, and over 8 million merchants. Its app serves as a platform for other businesses to reach users, explained Rahul Chari, co-founder and CTO of the firm, in an interview with TechCrunch. The company is currently not taking a cut for the real estate on its app, he added.
But these startups’ expansion into new categories means that they now have to face off even more rivals, and spend more money to gain a foothold. In the social commerce category, for instance, Paytm is competing with Naspers-backed Meesho and a handful of new entrants; and heavily-backed OkCredit and KhataBook today lead the bookkeeping market.
BharatPe, which raised $75 million two months ago, is digitizing mom and pop stores and granting them working capital. And PineLabs, which has already become a unicorn, and MSwipe have flooded the market with their point-of-sale machines.
A vendor holds an Mswipe terminal, operated by M-Swipe Technologies Pvt Ltd., in an arranged photograph at a roadside stall in Bengaluru, India, on Saturday, Feb. 4, 2017. (Photographer: Dhiraj Singh/Bloomberg via Getty Images)
“They have no choice. Payment is the gateway to businesses such as e-commerce and lending that you can monetize. In Paytm’s case, their earlier bet was Paytm Mall,” said Jayanth Kolla, founder and chief analyst at research firm Convergence Catalyst.
But Paytm Mall has struggled to compete with giants Amazon India and Walmart’s Flipkart. Last year, Mall pivoted to offline-to-online and online-to-offline models, wherein orders placed by customers are serviced from local stores. The company also secured about $160 million from eBay last year.
An executive who previously worked at Paytm Mall said the venture has struggled to grow because its goal-post has constantly shifted over the years. It has recently started to focus on selling fastags, a system that allows vehicle owners to swiftly pay toll fees. At least two more executives at the firm are on their way out, a person familiar with the matter said.
Kolla said the current dynamics of India’s mobile payments market, where more than 100 firms are chasing the same set of audience, is reminiscent of the telecom market in the country from more than a decade ago.
“When there were just four to five players in the telecom market, the prospect of them becoming profitable was much higher. They were scaling like crazy. They grew with the lowest ARPU in the world (at about $2) and were still profitable.
“But the moment that number grew to more than a dozen overnight, and the new players started offering more affordable plans to subscribers, that’s when profitability started to become elusive,” he said.
To top that off, the arrival of Reliance Jio, a telecom operator run by India’s richest man, in 2016 in the country with the cheapest tariff plans in the world, upended the market once again, forcing several players to leave the market, or declare bankruptcies, or consolidate.
India’s mobile payments market is now heading to a similar path, said Kolla.
If there were not enough players fighting for a slice of India’s mobile payments market that Credit Suisse estimate could reach $1 trillion by 2023, WhatsApp, the most popular app in the country with more that 400 million users, is set to roll out its mobile payments service in the country in a couple of months.
At the aforementioned press conference, Nilekani advised Sharma and other players to focus on financial services such as lending.
Unfortunately, the coronavirus outbreak that promoted New Delhi to order a three-week lockdown last month is likely going to impact the ability of millions of people to use such services.
“India has more than 100 million microfinance accounts, serviced in cash every week by gig-economy workers, who hawk vegetables on street corners or embroider saris sold in malls, among other things. Three out of four workers make a living by working casually for others or at their family firms and farms. Prolonged shutdowns will impair their ability to repay loans of 2.1 trillion rupees ($28.5 billion), putting the world’s largest microfinance industry at risk,” wrote Bloomberg columnist Andy Mukherjee.

Mobile payments firms in India are now scrambling to make money