LendingClub laid off 30% of its workforce; Facebook acquired a $5.7B minority stake in Indian conglomerate Reliance Industries’ technology and telecoms arm; American multinationals are pilot testing China’s central bank digital currency; Monzo applied for a U.S. banking license; and Alibaba announced a major investment in cloud infrastructure.
In the News
LendingClub lays off 30% of its workforce. The San Francisco-based online lender said it will lay off 460 employees as it deals with the coronavirus-related market downturn. The firm’s stock has fallen 40% over the past two months and expects revenues to decline significantly this year. CEO Scott Sanborn said he is taking a 30% pay cut while other executives are taking 25% cuts.
Facebook invests $5.7B in Reliance Jio. . . The U.S. social media giant has acquired a minority stake in the technology and telecoms arm of Indian conglomerate Reliance Industries for $5.7 billion. The deal is seen as a major boost for Facebook’s digital payments ambitions in India, with speculation it may even enable a parallel payments infrastructure to the government’s Unified Payments Interface.
. . . and plans to launch payments in Indonesia. The tech giant is preparing to apply for regulatory approval to launch mobile payments in the country in partnership with three local fintech firms. If approved, the venture could be among Facebook Pay’s first offerings. Ridesharing firm Gojek’s Go Pay, fintech firm Ovo (backed by Grab), and state-backed LinkAja will operate e-wallets in the partnership.
U.S. companies to help test China digital currency. U.S. multinationals McDonald’s, Starbucks, and Subway are among the companies listed to take part in a pilot roll-out of China’s central bank digital currency (CBDC). The pilot will test small transactions for consumer goods in Xiong’an, a new city being built south of Beijing. There is no information on the timetable for the official launch date of the CBDC.
Monzo applies for a U.S. banking license. The U.K. challenger bank has applied for a U.S. banking license so it can provide its full range of lending products and offer fully insured deposit accounts in the country. The move represents a significant step in Monzo’s U.S. expansion and, if successful, would put it ahead of competitor Revolut which has not yet applied for a U.S. license.
Alibaba makes cloud commitment. Alibaba announced that it will invest $28 billion (half the revenue the company’s revenue in 2019) in cloud infrastructure over the next three years. The firm hopes that the investment in cloud infrastructure will help to extend one of its fastest-growing businesses to more countries, complementing an existing network covering 21 regions globally.
Stripe announces three new features. The payments processor is rolling out new services to help businesses improve the payments experience, including: offering “card issuing services directly to businesses,” allowing them to make tailored cards for their customers; and launching an AI tool to “reassess and approve more flagged transactions that might have . . . been rejected in the past.”
Unsecured Paay database left millions of transactions exposed. The New York-based payments processor confirmed that one of its databases containing millions of credit card transactions did not have password protection for multiple weeks, potentially allowing anyone to access the information. Data in the system includes “the full plaintext credit card number, expiry date and the amount spent.”
Even Financial acquires ‘insurtech’ LeapLife. Even, which matches loans with borrowers, has acquired LeapLife, an insurance tech platform, to add to its offerings. The deal makes Even the first firm to offer an end-to-end, multi-carrier digital life insurance marketplace. Even believes the acquisition will put it at the forefront of consumer insurance offerings.