TFU | Nov. 18 – 24

Dear readers, we will be off next week in celebration of Thanksgiving in the U.S. (read: we expect to be in a four-day turkey-induced food coma). To those of you in the U.S., warmest wishes for a happy Thanksgiving!; and to everyone, best wishes for a good week ahead. We’ll return on December 9th. Best, The Fintech Update Team

Leading Off

Fidelity Digital Asset Services obtained a trust company charter from the NYDFS; former Comptroller Thomas Curry penned an op-ed on why the OCC’s proposed “fintech charter” shouldn’t be written off yet; Plaid expanded its European footprint, launching in Ireland, France, and Spain; PayPal announced its agreement to buy online rewards platform Honey for $4B; Robinhood launched a waiting list for users in the UK; and the Economist explores how and why the large tech firms are expanding into financial services


In the News

Fidelity gets NYDFS approval to custody bitcoin.  Fidelity Digital Asset Services received a trust company charter from the New York Department of Financial Services (NYDFS) [full text], allowing it to provide bitcoin custody services for institutional investors within New York State. Concurrently, Galaxy Digital Holdings chose Fidelity and Bakkt to “store the bitcoin for its two new funds.”

Curry: Congress should take up “fintech charter” cause.  Former U.S. Comptroller of the Currency Thomas Curry wrote an op-ed in the American Banker discussing the desirability for Congressional intervention to authorize national bank charters for fintech firms, following a recent court decision that sided with the NYDFS’s challenge of the OCC’s fintech charter proposal. 

Plaid expands across Europe.  The San Francisco-based bank services firm, which helps connect bank accounts to third-party apps through its proprietary APIs, is rolling out its services to customers in Ireland, France, and Spain. Plaid made its first foray into Europe with an early-2019 launch in the U.K. and is seeking to expand its footprint in the region by capitalizing on Europe’s open banking rules.

PayPal to buy Honey for $4B.  PayPal plans to buy Honey Science Corporation, producer of a popular browser extension that automatically searches the internet for shopping discounts and rewards to apply to user purchases. The acquisition would give Honey access to PayPal customers while helping PayPal reach shoppers earlier in the customer journey. It would be PayPal’s largest acquisition to date. 

Robinhood gearing up U.K. launch.  The San Francisco-based zero-fee stock trading app said that it was opening a sign up waiting list for people in the U.K. ahead of a full launch planned for Q1 next year. The company received regulatory approval over the summer from the Financial Conduct Authority to operate as a broker in the U.K. 

FedNow proposal draws concerns from banks.  The Federal Reserve’s plan to develop the FedNow system to facilitate faster payments and settlement is reportedly drawing opposition from large banks, which are “trying to persuade Congress to block the Fed plan” because it would allow tech and fintech firms to more easily enter the payments business.

Report: Fintech startups have attracted $24.6B in 2019.  A new report by CB Insights notes that fintech startups have already raised more venture capital through three quarters of 2019 than they did in all of 2017 combined. Though 2019’s number will likely trail 2018’s record fundraising, financial deregulation and data sharing initiatives appear to be fueling global investment in fintech. 

BlueVine raises $102.5M.  Small business banking vendor BlueVine Capital raised $102.5 million in a Series F funding round led by ION Crossover Partners. Prior to the equity financing round, BlueVine launched new business checking accounts and debit cards to supplement its existing suite of products, which includes financing facilities such as line of credit, term loan, and invoice factoring services.

OPay raises $120M.  The Nigerian mobile payments services startup raised $120 million in Series B funding driven by Chinese investors. The new funding, which follows a $50 million round in June, will be used for geographic expansion into Kenya, Ghana, and South Africa, furthering the firm’s mission to increase financial inclusion in Africa.

Big Tech takes on retail banking.  On the heels of Facebook, Google, Apple, and Amazon announcing new financial products or services in the past year, the Economist explores how Big Tech is growing increasingly interested in banking. Ultimately, the publication concludes, tech firms are less interested in the plumbing of retail banking than in the distribution and data benefits it represents. 

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