Not so fast: the MetroCard isn’t going away just yet, and neither is cash.

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Source: MTA

Nearly 30 years ago, New York’s subway turnstiles began a transition from tokens to MetroCards — what was then a cutting-edge technology for payment and fare collection. Now, in a sign of the times, the country’s oldest subway system is about to once again transition to a new form of fare payments for an increasingly cashless world.

The financial services industry is touting the New York City subway’s tap-to-pay pilot as the dawn of a new era, but the MetroCard isn’t going away yet, and for many commuters the benefits won’t take effect for some time.

On Friday, the Metropolitan Transportation Authority launched OMNY, which stands for One Metro New York. The system lets commuters tap their contactless debit and credit cards at the turnstile when they take the subway. It’s a 6-month pilot across 16 stations between Grand Central-42nd Street and Atlantic Avenue-Barclays Center on the 4–5–6 lines, as well as Staten Island buses. …

The debt management startup is now incentivizing consumers to save the same way credit cards lure them to spend.

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Tally cofounders Jason Brown (left) and Jasper Platz

Tally has launched an automated savings app that lets users earn rewards points for saving, as opposed to incentivizing spending like most rewards systems do.

The standalone app, called Tally Save, is separate from its initial product, a debt management app that automates credit card payments. …

Global Payments CFO talks TSYS merger, digital payments and a cashless society.

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Image: Shutterstock

Global Payments and Total System Services have inked a $21.5 billion deal to merge, the two companies announced Tuesday, in a major realignment of the payments business as legacy processors fight to compete with upstart processors like Stripe and Square.

This is the third payments megadeal of 2019. Fidelity National Information Services, better known by the abbreviation FIS, struck a $34 billion deal — the largest ever in the fintech space — to buy Worldpay in March. Two months earlier Fiserv agreed to buy First Data for $22 billion.

Global Payments is the fifth largest merchant acquirer in the U.S., meaning it processes credit and debit card payments for merchants. About 75 percent of its revenue is generated in North America. Half of its revenue comes from technology-enablement channels like integrated payments, e-commerce, and omni-channel services. …

Customers can now invest in seven cryptocurrencies, including bitcoin and ethereum, and track price movements and news for 10 other crypto assets.

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Source: Robinhood

Robinhood Crypto is set to launch for residents of New York State Thursday.

The New York launch comes five months after Robinhood, which was initially founded as a free consumer stock-trading app, received a virtual currency activities license (aka the BitLicense) and a money transmitter license from New York State.

“We’ve introduced millions of people to equity investing on Robinhood, and want to do the same for everyone interested in crypto, so launching in New York is a crucial next step,” Josh Elman, VP of product, told Cheddar by email Wednesday.

Robinhood has been adamant about its plans to “democratize access to the American financial system” — something of a chorus among fintech startups. Operating in New York is obviously an integral part of achieving mainstream and institutional adoption, with 20 million consumers and the largest financial hub in the world. …

CEO Jason Gardner says the funds will be used for international expansion and to push further into consumer credit.

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Photo: San Francisco Business Times

The Oakland, California-based Marqeta has closed a $260 million in Series E funding to fuel its global expansion — and move further into consumer credit.

“There’s credit in the U.S. and there’s credit around the world,” Jason Gardner, Marqeta’s CEO, told Cheddar in an interview Monday. “We’re seeing credit increase throughout Europe, and it’s a new phenomenon within pretty much all of Asia. As we begin to grow and globalization begins to take hold further, the ability to use credit is going to become more and more important.”

Asia dominates the global payments revenue pool, according to an October report by McKinsey, but consumer and commercial credit cards drive just 6 percent and 2 percent of it respectively, compared to 35 percent and 11 percent in North America. …

Fintech startups have focused on partnerships with banks, but are finding distribution channels in brands that can bring their products to the masses.

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T-Mobile’s new bank account might not pose a competitive threat to the biggest U.S. banks, but it’s a strong competitor to the many startups vying to shape how people save and manage their money.

The wireless phone company partnered with BankMobile to create a debit account for its customers with a whopping 4 percent return on deposits, if they deposit at least $200 each month, and 1 percent back for prepaid customers and everyone else. It announced the offering last fall and rolled it out nationally on Thursday.

The product, called T-Mobile Money, will remain entirely separate from its core wireless business, according to Tiffany Minor, director of marketing for T-Mobile’s financial services business. …

Mastercard’s acquisition of Vyze opens the door for adoption of POS financing in a way acquirers might not be able to achieve.

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As banks, merchants, and even tech companies offer consumers new and different ways to pay for stuff, credit card companies are trying to protect their role as the pre-eminent platform for everyday purchases by offering more buy-now-pay-later options.

That’s why MasterCard paid an undisclosed amount this week for the point-of-sale loan platform Vyze, which lets consumers take small, short-term loans for everyday purchases without racking up credit card debt.

Increasing payment options for consumers buying non-essential items is one way MasterCard hopes it can help merchants finance more sales with less risk, and add a new revenue stream as some consumers forgo credit-card purchases. …

U.S. consumers are justifying faster spending with rewards. But what if they received stock instead of cash back?

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Consumers who filled up their gas tank at a Shell station or bought a venti caramel macchiato at Starbucks with their Stash debit card last month earned a small stake in those companies by way of the investment startup’s new “stock-back” rewards program.

Iterating on the nearly ubiquitous cash-back rewards program, Stash offers consumers stock to help them build investment portfolios that reflect their regular spending habits. Since launching the program a month ago, Stash customers have earned fractional shares of stock from 500,000 qualifying transactions, the company said. It declined to disclose the total value of those rewards.

“People are learning more and more that they can be an investor the same way they live their life and that’s the mission: to get more people to be investors and more people to ultimately learn about the companies out there,” the Stash CEO and cofounder Brandon Krieg told Cheddar. …

Anthony Noto has been building out SoFi’s suite of financial services since he joined in early 2018.

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Anthony Noto.

SoFi is on the hunt for millennial, mobile-first investors with two new exchange-traded funds announced Thursday—the latest customer acquisition play for its broader membership strategy.

The new ETFs, or baskets of securities for retail investors that trade on a public exchange, will join the company’s stock-trading and robo-advice products that currently sit under the SoFi Invest umbrella. SoFi doesn’t charge commission fees and is waiving management fees until at least June 2020.

“Some of our products will be for [customer] acquisition, such as this one, and some will make money,” SoFi CEO Anthony Noto told Cheddar on Thursday. “We think it’s a great combination to appeal to people who are underserved by the financial marketplace today. We are a mobile company first and foremost, but we’re still a personal finance company and we want to give new and novice investors an easy way to learn how to invest.” …

The blockchain startup building a decentralized internet wants to raise $50 million in the first SEC-approved security offering of its kind.

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Blockstack CEO Muneeb Ali. (Photo: Blockstack)

Blockstack, the startup building a decentralized internet that inspired the main storyline in the HBO show “Silicon Valley,” is looking to raise $50 million through the SEC’s “mini-IPO” framework. If approved, the move would be the first government-sanctioned public security offering from a U.S. blockchain company.

The New York-based startup filed its offering statement with the Securities and Exchange Commission on Thursday using its Regulation A+ “mini-IPO” framework, which lets early-stage companies raise up to $50 million from the general public. Only a handful of Reg A+ companies have moved on to list on a public exchange.

Blockstack plans to use the net proceeds of the offering to develop its decentralized computing system and app ecosystem. Since 2013, the company has been building an alternate, blockchain-based internet that removes the need for people to trust large companies and platforms to protect their data. …


Tanaya Macheel

Reporter for Cheddar covering financial services and the future of money.

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