This week, our technology director Tony steers Our Week in Digital towards the world of Fintech. He turns his attention toward all the latest news from this ecosystem. Fintech is exciting as it is groaning under the promise of growth and investment.
Recent reports indicate that a whopping 87 deals have totalled a record year-to-date value of $116.6 billion. This is a four-fold increase from the $31.8 billion through the same time last year. This comes despite the fact that MORE deals had been finalised. In 2018, there had been 89 deals done in the same time period.
This week, savvy startups and tech Big Hitters all feature to make this edition of Our Week in Digital, a fintech enthusiast’s must-have!
This week it has been revealed that PayFit, one of the fastest-growing tech companies in Europe has launched here in the UK. This week’s news follows PayFit’s previous funding round back in June. the round saw the software startup raise $79m from Eurazeo and Bpifrance.
PayFit currently has offices spanning Europe and over recent years has built a workforce of over 300. Over the next 12 months, they plan to expand their reach. They plan to open an Italian office and growing its team to more than 600.
In the UK, this exciting Fintech calls Shoreditch home. Their ‘silicon roundabout’ office currently houses 18 staff and predicts to grow this number to 30 by the end of 2019.
The PayFit Journey
PayFit started its journey in 2016 and its software has reinvented the HR process for small and medium enterprise. PayFit software offers end to end automated solutions to SMEs across the world. It has digitalised everything from payslips to holidays, expenses and Right to Information submissions.
PayFit already enjoys the patronage of more than 4000 global SME customers. With this latest move, it hopes to dominate in a market closer to home. The UK houses 5.7m small and medium business models. It is second only to Germany in terms of the numbers of people employed by these companies. Indeed, SMEs here in the UK, account for 99% of all private business.
Firmin Zocchetto is the co-founder and CEO of PayFit. He has remarked that this is “only the beginning” and that Europe is an “incredible market”; packed to the brim with “tens of millions of SMEs that want to digitalise themselves”.
Nick Miller, Payfit’s UK Managing Director backs up the assertion that the UK is a great opportunity for Payfit. He stated that;
“Not only does the UK have one of the largest populations of SMEs in Europe… it’s also a very digitised market. Despite this, the innovation in payroll and HR has traditionally under served SMEs”. He believes this marriage of factors makes this a prime opportunity for PayFit to continue its trajectory of incredible growth.
Travelex launches new API led B2B fintech platform.
Travelex has launched a new B2B Fintech platform called Travelex Business. This will allow the company’s partners including banks, credit unions, retailers and digital technology companies to access a broad range of payments and foreign exchange services from one place.
The new platform will provide a seamless way for established and emerging markets to move money around the world.
Travelex Business will use omnichannel and multi-currency capabilities to resolve a wide range of enterprise and consumer needs. Via its API it will look to address issues such as cash management, cross border payments and retail currency conversion.
The launch of Travelex Business follows a four-year digital transformation project at the foreign exchange specialist. Gareth Williams, Chief Product and Innovation Officer has spoken out about the long term work and effort put into the project.
“The platform is the culmination of years of hard work by Travelex and collaboration across the Finablr network. By revolutionising how we work, the technology we use, and the partners we work with, we have combined four decades of experience with a new microservices architecture to build a market-leading global fintech platform. Critically, working with Finablr, we have adopted a modern engineering culture with self-organising teams in order to create and iterate on a new and innovative suite of services”.
He goes on to highlight the benefits of the service for its customers. He believes that ;
“Travelex Business ensures companies get to market quicker, increase revenues and boost customer value with agile services available at the click of a button.”
Payment card App, Mitto raises €2m in latest seed round.
Mitto is a debit card and app designed for “Generation Z” teens. This week it has been reported that Mitto has raised €2m in seed round funding.
Among other investors, the innovation arm of Spanish bank Banco Sabadell, Innocells is backing the round, alongside Athos Capital and Spanish social media influencers “AuronPlay” and “Wismichu”.
There is a gap in the market for these generation Z-ers…a term referring to teens older than 14 years. Prior to this, this demographic had no representation amongst an emerging and prosperous eco-system. As such, it was only a matter of time before savvy fintech entrepreneurs grabbed this opportunity with both hands.
Mitto offers a digital wallet and/or a physical card for online and offline spending. Parents can instantly send money to their children and are able to get an overview of their child’s “purchasing” profile.
The gap in the Fintech market
Up until now, Generation Z haven’t had easy access to a tool educating them about digital money, says Mitto co-founder Marcos Cuevas. Despite the fact that this demographic enjoys more “digital freedom” than any teen generation before them, there has been very little opportunity for financial independence.
Cuevas believes Mitto is best placed to remedy this shortfall.
“Mitto is born to fix this by allowing [teens] to own a digital wallet and virtual and physical cards. At the same time, we allow parents to educate and support financially their children in their first steps using a digital financial product.”
When addressing what Mitto plan to do with the funding, Cuevas has ambitious and 360 degree aspirations. He has stated that Mitto is
“…committed to helping this new generation to change their mind about finance, to succeed by giving them the tools to understand their purchasing habits and — in the future — the impact of their decisions in the world, and how they can help to make it more sustainable.”
The Spanish fintech wants to launch its proposition in other European and Latin American countries across the globe where it says demand exists. Mitto claims to have an established customer base of more than 150,000 registered users with a waiting list of more than 80,000 – all wanting to use its services across several countries.
Challenger banks have been working hard to provide an alternative to more traditional banking models for some time. Our Week in Digital has routinely reported upon the funding and growth of these pioneers of Fintech. As our world (and those living within it) have to become digitally literate to keep up, it seems sensible that the younger generations can combine digital literacy and financial responsibility.
FairMoney raises $11m for its challenger bank for emerging markets.
Fintech startup, FairMoney has announced this week that they have raised an $11 million Series A round (€10 million) to expand their challenger bank across Nigeria. This latest round has been led by Flourish, DST Global partners and existing partners Newfund, Speedinvest and Le Studio VC.
The company started out by offering micro-credit and now plan to use this new capital injection to grow their portfolio. They intend to extend into both current accounts and savings. FairMoney already has a lending license in Nigeria, and now they will partner with microfinance institutions to allow them to realise their ambition of breaking into current and savings accounts and to facilitate payments. However, eventually, FairMoney hopes that it’ll get its own microfinance license from the central bank.
How it works
FairMoney allows applicants to receive a loan directly from its mobile app. A decision is made in minutes and is based on applicant financial information along with geolocation, other apps installed on the phone and other contributory factors.
On average, people borrow the equivalent of around £25, and should they repay on time they could receive credit to the value of about £350. Interest rates vary depending on repayment periods and other factors, but the maximum annual percentage rate is 13%.
Once a decision is made, FairMoney uses traditional bank transfers to credit the money. You can then repay using cash with partner banks, bank transfers or SMS.
Like all challenger banks, FairMoney has ambitions to become a one-stop financial hub for all its customers’ banking needs, with one app controlling all their services. However, they have recognised the environment in which they work. While much of Nigeria is digitally connected, they have recognised that not all of the nation is wi-fi enabled or has data plans on contract phones or smart devices. For these customers, they have a solution in the pipeline. FairMoney is working on an SMS interface that will enable money transfer.
Google chases business to maintain its payments lead in India.
Feisty Fintech startups are not the only ones looking to make waves amongst emerging markets across the globe.
This week, Silicon Valley giants, Google have announced that it is bringing its mobile payments app – Google Pay – to businesses across India.
Despite the fact that over 400 million users across India are online today, most businesses are not.
Ambarish Kengh is director and product manager for Google Pay. At Google’s annual event in New Delhi, he stated that
“India has more than 60 million small and medium-sized businesses, however only a fraction portion of them support digital payments. Imagine the transformation that is possible if more of these merchants could access payments online”.
The company plan to address the challenges facing Indian enterprise customers by launching Google Pay for Business. It will be a standalone app that will enable businesses to accept online payments without having to deal with an agent. Enterprise customers will be able to support digital payments at their own convenience through a remote video process, taking only minutes.
The company also unveiled a software platform called Spot. Spot will allow businesses to easily create their own branded commercial fronts that will be accessible to customers through the Google Pay app.
For example, if a restaurant has built its storefront, users will now be able to see their offerings in Google Pay app itself.
Looking at the bigger picture, the space is crowded and competitive. The Indian payments market is on the rise. According to Credit Suisse it is estimated to be worth $1 trillion by 2023. Today, Google’s campaign is rivalled by names such as PhonePe, Amazon Pay, and Paytm. The latter of which has raised over $2.3 billion from investors and is the country’s most popular mobile wallet app.
Google has also announced that it is bringing tokenised cards for debit and credit cardholders in India. This will allow customers to pay for things using a digital token instead of their actual card number. The project will begin with Visa cards and aim to support Mastercard and Rupay at a later stage.
The addition of new features is crucial for the evolution of Google Pay. Before this week had no real features that set them apart from the crowd. They also have a race on their hands. Facebook’s WhatsApp has over 400 million users across the sub-continent. It’s also planning to expand its UPI-based payments service to all its users by the end of the year.
It has also been revealed that the aforementioned market leader, Paytm is working to expand its reach in the nation, too. It said earlier this month it intends to invest another $3 billion into its business throughout the next two years.
Have any other Fintech stories caught your eye this week? We’d love to hear your thoughts on Tony’s top picks. Leave your comments below!