Thirty-seven community groups called on the FDIC to reject Square’s ILC application; Apple and Goldman Sachs announced their plans to jointly release an iPhone-based credit card; Mizuho clinched support of AliPay and UnionPay for the rollout of its new digital currency platform; Mastercard is working with a domestic partner on a JV to enter the Chinese payments market; the government of Seoul, South Korea set up a $1B investment fund for fintech and blockchain startups; and SoFi is expanding its business lines to include investment services and new types of loans.
In the News
Community groups ask FDIC to reject Square ILC application. Thirty-seven community groups submitted a letter to the Federal Deposit Insurance Corporation (FDIC) encouraging it to reject Square’s application to become an industrial loan company (ILC), arguing its proposal is weak – particularly with regard to its business loans and Community Reinvestment Act compliance.
Apple and Goldman plan joint iPhone-based credit card. The firms will officially launch the card later this year, offering consumers extra features like rewards and spending tracking in Apple’s Wallet app. The venture represents another step in Apple’s push into the financial services, as well another move in Goldman’s recent strategy to appeal to non-high net worth consumers.
Mastercard tries again to enter China. The global payments giant is partnering with NetsUnion Clearing Corp. to establish a joint venture that would give the company exposure to the Chinese market after several failed sole and joint bids to the People’s Banks of China. China has kept its financial services sector closed to U.S. firms “for more than a decade, and progress has been slow.”
SoFi expands product lineup and loan offerings. The online lender plans to expand its product mix to include stock-trading, exchange traded funds, and additional loan offerings. The move signals an effort to compete in other product areas and with non-lenders, including fellow fintech firms like Robinhood, Betterment, and Wealthfront.
Metro Bank biggest winner of RBS bailout fund. The nine-year-old U.K. retail bank received £120 million of the RBS capability and innovation fund, an EU condition to the bailout of the U.K. big four bank to boost competition. The other recipients were Challenger bank Starling with £100 million and business banking fintech Tide, which applied with infrastructure provider ClearBank, with £60 million.
Seoul announces $1B startup fund. The government of South Korea’s capital has committed to investing $1.07 billion by 2022 into startups, including fintech and blockchain firms. City leaders hope the fund will help increase the average initial investment in South Korean startups, which at $1.1 million is currently around one sixth lower than the average in Silicon Valley and London.
Coinbase acquires blockchain-tracking startup Neutrino. The crypto exchange purchased blockchain analytics startup Neutrino as part of a wider push to offer more diverse crypto assets across borders. Coinbase director Varun Srinivasan commented that the firm is “beefing up our abilities to do compliance and to work with regulators on issues across the space.”
Mizuho confirms AliPay and UnionPay support for J-Coin. Mizuho Bank continues to prepare for the launch of its new digital currency platform J-Coin Pay on March 1st, with the support of 60 regional financial institutions. The value of the digital currency, which will be accessed on a dedicated smartphone app, will be “fixed at 1 yen per unit, and will not fluctuate on the market.”
Adyen launches open banking-powered payment method. The Dutch payments platform launched an open-banking 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. Dutch airline KLM will be the first big brand to roll out Adyen’s new service.