DSV Fintech Market Intelligence — January 2017
Tide, a mobile-first banking app for small businesses, has launched in the UK with fintech czar and Passion Capital partner Eileen Burbidge as chairman.
Founded by former RBS/Worldpay head of innovation George Bevis, Tide launches after raising more than $2m in funding in 2016. The business — backed by VCs LocalGlobe and Passion Capital and prominent angel investors — enables users to set up a fully functioning business account in a matter of minutes using their passport or driving licence.
Tide members will be given a UK sort code and account number with a business Tide Mastercard for daily expenses. The firm says all UK sole traders and limited companies with UK shareholders are guaranteed to be accepted as Tide customers.
Tide’s iOS and Android apps provides account holders with an automated book-keeping service, handling supplier invoices and payments and categorising transactions as they are made. Finextra
DSV Take: Business banking is riding the coat-tales of the gig economy, in synch with inflation for other segments catering to the rise of self-funded and VC funded private entrepreneurial forays, unwilling to emulate the old ways of doing business, including:
accounting and payments (Xero, Albert)
fitness (24-7 and subscription based fitness cards)
business expenses management (corporate product of Revolut)
The SME drive is also supported by data aggregation making small services part of complex ecosystems (where physical services integrate in real world supply chains, virtual become part of API ecosystems). Managing micro-payments as well as relationships of these small enterprises require much better flexibility than traditional business banking could allow, so apart from business banking focused on accounting we can expect new services to help SMEs to integrate into the fabric of the global manufacturing, logistics and warehousing hubs.
Munnypot, a mobile-first robo-advisor service created by the former founders of financial advisory firm Cavanagh Group, has soft-launched in the UK with a range of corporate partners.
Munnypot, which provides an intuitive WhatsApp style ‘chat-based’ user-interface that guides people in their savings and investment decisions, has already secured the backing of SEI wealth management. New partners now include Virtual Affairs, Ortec Finance and Five Degrees. Users begin by answering simple questions online to define their life goals. They can then ‘play’ with different scenarios using five tracker products to understand how their financial future could be affected by different decisions.
The startup has been set up by Simon Redgrove and Andrew Fay, who previously founded Cavanagh Group, which was sold to Close Brother in May 2011 for £26.2m with assets under advice in excess of £1.5bn.
Finextra
DSV Take: Roboadvice remains a hot topic bent to reinvent the premium savings layer for the world of low interest rates and new generational shifts demanding simplicity and breadth of choice while discounting complexity and learning curve originally required to master the art of investing.
Starbucks have announced the launch of its vertical AI bot able to receive voice and text to communicate with users with regards to them ordering remite coffee preparation.
The implication for this is that Starbucks has more accrued balance on its prepaid cards program than certain major banks and onboarding voice tech would create additional pressure for banks to follow suite and:
enable voice communication to allow simple queries
contextualise financial information as part of the users routine of using social messengers
Apple and Square on Monday announced a partnership which will let U.S. businesses process over $12,000 in Apple Pay transactions for free, saving up to $350 in Square costs so long as merchants set up a marketing kit designed to promote Apple’s platform.
DSV Take: Apple is feeling the pressure to up the ante of its payments game and promoting the uptake of Apple Pay in the micro-payment segment where tier-2 merchants are predominantly using mPOS solutions.
In addition, iZettle announced early January it has raised USD 63 mio to fuel international expansion (scale) and onboarding of new tokens (mpayments good for micropayments, hence ongoing investment from schemes). The company is also integrating loyalty and analytics services to set tier-2 merchants on solid footing with traditional providers and defent against fee erosion (comparing tier 2 vs tier 1 acquiring).
Chase customers can now import their financial data to Intuit financial management tools without having to hand over their account credentials, addressing a key flashpoint in bank relationships with third party technology companies. The agreement between Intuit and Chase aligns closely with the Center for Financial Services Innovation’s “Consumer Data Sharing Principles,” released in October 2016 Finextra
DSV Take: A number of important documents (US, Canada and white papers has been recently published on the path towards faster payments and distributed access to underlying data currently stored by financial institutions. A second wave to formulate a standard set of financial APIs is coming about in key regions willing to establish themselves as platforms for fintech, requiring
Adding flexibility and accelerating change with both new services and recreation of old ones via new developer tools and frameworks (FIS real-time payments)
Building a standard set of tools to request and integrate financial data to new services (X2A and ISA services for PSD2, APIs for inter-bank communication as a route to faster payments (Token)
Securing privacy of underlying data (Token)
Daimler Financial Services is acquiring Luxembourg-based e- money institution PayCash Europe under plans to build its own electronic payment service using the ‘Mercedes pay’ brand name.
Mercedes pay will be integrated into Daimler Mobility Services, which incorporates car-sharing venture, car2go, and the mytaxi taxi app, which operates in nine European countries. The company also plans to use the new payment system across its vehicle financing franchise in the future. PayCash — which was founded in 2012 — also handles cryptocurrencies, such as bitcoin and eWallets, in addition to mobile payment services. Finextra
Carmakers are slowly turning themselves to the world of shared transportation — investing in AI and self-driving tech, sharing schemes for taxis and payment infrastructure (see Volkswagen buying PaybyPhone that manage parking space payment infastructure) to calculate both the charges as well as to account for personal costs that should be charged based on car usage duration.
Trends to watch:
- insurance brokerage by OEM
- car telematics services
- blockchain / smart contracts for distributed ownership
