Hi all, The Fintech Update will be off next week in observance of the Easter and Passover holidays. We hope you and your families are doing well and staying safe amid the ongoing disruptions caused by Covid-19, and we wish you all the best for happy and healthy weeks ahead. Take care, The Fintech Update team
Kabbage suspended small business credit lines amid a coronavirus-related cash crunch; Venmo and Square’s Cash App offered to support Treasury in disbursing coronavirus stimulus funds to qualifying U.S. citizens; Microsoft partnered with Plaid to integrate new functionality into Excel; Marriott confirmed it experienced a data breach in February, exposing data on over five million guests; and Revolut hired a new CEO and board chairman for its U.S. operations.
In the News
Kabbage cuts off credit to small business clients. The SoftBank-backed online lender suspended credit lines to its small business clients as it “contends with a slowdown in spending at small businesses, which have suffered [amid] the deadly coronavirus pandemic.” Kabbage reportedly did not provide any notice to its borrowers prior to suspending their credit, drawing the ire of many affected clients.
Square and Venmo vie to distribute stimulus funds. The two payments firms engaged the U.S. Treasury Department in discussions about helping deliver coronavirus stimulus funds to the public “immediately.” Stimulus money generally will be distributed via direct deposit, but that option may not be available to all citizens who qualify; however, Square and Venmo users do not need bank accounts.
Microsoft partners with Plaid on Excel app. The software giant teamed up with the financial data transfer firm to develop the Money in Excel app, which will allow consumers to turn the spreadsheet program into a powerful “fintech app” by connecting it to the Plaid platform. Consumers will be able to import bank account data, sync balances, and track their transactions through tools in Excel.
Marriott confirms another data breach. The global hotel chain disclosed that it suffered a data breach in late February that exposed the personal information of 5.2 million guests, the company’s second breach in three years (a 2018 hack exposed data on 383 million guests). Marriott said “names, addresses, phone numbers . . . dates of birth and other travel information” were taken in the breach.
Revolut makes two key U.S. management hires. The British challenger bank, which recently launched in the U.S., hired a new CEO and board chairman to run its American operations. Ronald Oliveira, who was most recently president of San Jose, CA-based AvidBank will be CEO of Revolut U.S., while former Silicon Valley Bank COO Bruce Wallace will chair the U.S. board.
Judge denies Telegram request to issue tokens to non-U.S. investors. Judge P. Kevin Castel of the Southern District of New York denied the messaging app’s request for an injunction opposing the Securities and Exchange Commission’s (SEC) order against issuing tokens to anyone, globally. The decision is the latest in protracted court proceedings against Telegram following its $1.7 billion token sale in 2018.
Chime pilots instant $1,200 stimulus checks. Using a feature called SpotMe, the digital banking firm picked 1,000 customers to receive coronavirus stimulus payments through its app. SpotMe is Chime’s free alternative to bank overdrafts; and the move will allow chosen users to spend the value of their estimated stimulus payment weeks earlier than if it were done through a direct debit payment.
Monzo and Starling furlough employees. Monzo, offering some of its staff voluntary furloughs and taking advantage of the UK government’s job retention scheme, is accepting 295 of such applications out of a staff of 1500. CEO Tom Blomfield will not take salary for 12 months while his management team agreed to a 25% reduction in salary. Competitor Starling is furloughing 41 employees.
Fitbit standardizes contactless payments on new wristbands. The fitness wearables firm launched its latest wristband, the Fitbit Charge 4, with the company’s prepaid wallet and contactless payments as a standard feature. This is the latest feature enhancement Fitbit has made to keep up with Apple’s smartwatches, which also include an e-wallet.
Zero rates could hamper stablecoins. A column in CoinDesk argues that the recent collapse in U.S. interest rates will force some issuers to re-work their business models or even shutter operations. The article highlights that monoline stablecoin issuers, which depend on interest payments to generate revenue, may need to introduce fees to stay afloat.