Friday April 17, 2020 –
Here are the new and noteworthy stories we have been following this week.
PayPal, Square Start Lending to Small Businesses Hurt by Virus
PayPal, Square, and Intuit have received approval from the Treasury and are starting to lend to small businesses under the government’s ‘Paycheck Protection Program’ (PPP); these companies are using their technology prowess to process loans faster and are focusing on small businesses that are traditionally undeserved by large banks.
Andreessen Horowitz aims to raise $450m for second cryptocurrency fund
Andreessen Horowitz is reportedly raising $450 million for a second cryptocurrency investment fund; Andreessen was one of the first venture firms with a large fund dedicated to cryptocurrencies, raising $350 million in 2018 for start-ups working on the blockchain technology underpinning digital coins.
https://www.ft.com/content/329ca57b-5b57-4c81-9037-e704ef5c4476
CaixaBank and Global Payments form prepaid JV
Spain’s CaixaBank is teaming up with Global Payments on a European prepaid card joint venture called MoneyToPay which will be processed by Global Payments NetSpend business; Global Payments will own 51% of the new brand, with CaixaBank holding the remaining 49%.
https://www.finextra.com/newsarticle/35622/caixabank-and-global-payments-form-prepaid-jv
Stripe raises $600 million at nearly $36 billion valuation
Stripe has raised $600 million in new funding and is now valued at nearly $36 billion; the company is experiencing phenomenal growth led in part by the impact of the coronavirus and the massive acceleration of physical to digital payments.
https://www.axios.com/stripe-fundraising-600-million-1f1f38b6-fde6-4316-b111-2f3b0e868ab7.html
ANZ and Salesforce back Airwallex in $252 million raise
Cross-border payments fintech Airwallex has raised US$160 million (AUD252 million) in new funds from investors including ANZ and Salesforce bringing its total funding to date to US$362 million; the company will use the funds to accelerate its growth in Europe, the US and new markets, expand its product line to include payment acceptance solutions through a proprietary gateway and for potential acquisitions in the payments space.
Santander takes on TransferWise with UK launch of PagoFX
Banco Santander has launched a cross-border payments app PagoFX in the UK with plans to expand it to other European countries later this year; PagoFX will allow UK residents with a debit card issued by any UK bank or financial institution to send money abroad using just their smartphone.
https://www.finextra.com/newsarticle/35637/santander-takes-on-transferwise-with-uk-launch-of-pagofx
Facebook’s Libra cryptocurrency gets revamp in response to backlash
Facebook is announcing a major revision to its planned cryptocurrency Libra which will now be linked to individual national currencies and overseen by global regulators; Facebook is seeking approval from the Swiss national financial regulator FINMA which has confirmed receipt of Libra’s application for a payments system licence.
Robinhood is raising new capital at $8 billion valuation
Robinhood is reportedly in the process of raising more than $200 million of new capital at an $8 billion valuation; according to various sources, Sequoia Capital is leading the equity raise along with multiple investors.
https://www.cnbc.com/2020/04/16/robinhood-raising-capital-at-8-billion-valuation-sources-say.html
Leaked pics reveal Google smart debit card to rival Apple’s
According to imagery obtained by TechCrunch, Google is working on a debit card to support in-store shopping and to complement its mobile and in-app payment service; lots of speculation about the card and its features but lots of unknowns as well. (Note, TechCrunch writes that Google, “…could potentially charge interchange fees on purchases made with the card” – this is incorrect, the card issuers (in this case Google’s FI partners) would receive interchange).
https://techcrunch.com/2020/04/17/google-card/
US banks brace for surge in loan losses
Based on first quarter results, loan loss provisions at six large banks (Chase, Bank of America, Wells, Citi, Goldman, Morgan Stanley) have reached $25.4 billion up about 350% from Q1 2019 signaling growing pessimism for the economy as well as consumers and businesses; the introduction of the ‘Current Expected Credit Losses’ (CECL) rule this year will make loss forecasting more challenging and create additional P&L complexity.
https://www.ft.com/content/87189e79-a442-44b9-a699-7bce47b5bc64
