Uncle Sean's Update - 10/28/22

Happy Friday!!!
 
Looking forward to our FedFis Roundup conference next week – it’s the largest gathering of BaaS Sponsor Banks EVER – and always free for bankers because of our AWESOME sponsors!  But first, here is the Uncle Sean Update for 10/28/22:
 

• Hey – have you heard of this thing called BaaS???  LOL!!!  Well, the Office of the Comptroller of the Currency announced it will establish an Office of Financial Technology early next year to bolster the agency’s expertise and ability to adapt to a rapidly changing banking landscape.
  • “Financial technology is changing rapidly and bank-fintech partnerships are likely to continue growing in number and complexity. To ensure that the federal banking system is safe, sound, and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape,” said Acting Comptroller of the Currency Michael J. Hsu. “The establishment of this office will enable us to be more agile and to promote responsible innovation, consistent with our mission.”

 

• Holy Cow – the Connected BaaS / Middleware space really made headlines this week with many new offerings.  No wonder the OCC is looking at this closely (and indeed they should):
  • Marqeta makes a move from modern card issuing to full Connected BaaS / embedded finance offering by announcing product expansion called Marqeta for Banking.
    • In addition to Marqeta’s card issuing, the Marqeta for Banking platform now includes:  Demand Deposit (DDA) Accounts, Direct Deposit and Early Pay, ACH with Plaid integration, Cash Loads and Fee-Free ATMs, Bill Pay, and Instant Funding.
  • Synctera expands their Connected BaaS offering by announcing Synctera Smart Charge Card and Synctera White Label Banking App less than two months after the launch of Synctera Line of Credit.
  • Now this is very interesting and gets deep really quick…  Adyen (foreign bank and global payments conglomerate) launches embedded financial products in the US and Europe called Capital and Accounts.  This is intriguing to Uncle Sean, so let’s dig a little bit deeper (I completely geek out here so feel free to scroll down – LOL):  😊
    • A domestic US Branch of a Foreign Bank launching BaaS / white labeled embedded finance solutions probably should get a little more attention.  How did we get here?  Well, I’m glad you asked – LOL:
      • Adyen received their European banking license back in June 2017.  Subsequently, in May of 2021, Adyen obtained OCC approval as a Foreign Bank Branch enabling them to offer checking, loans, and card issuance (as a domestic branch of a foreign bank).  This specifically geared towards business accounts as there are restrictive regs surrounding retail domestic deposit-taking activities from a foreign bank branch in the US.
    • HOWEVER, keep in mind that the Adyen Account aspect is not an FDIC insured account.  Reference the footnote disclosure #4:
      • “Accounts in the U.S. are issued by Adyen N.V., San Francisco Branch. Adyen N.V., San Francisco Branch is not a member FDIC. Monies deposited in an Adyen Bank Account in the United States are not FDIC insured, are not guaranteed by Adyen and may result in the loss of the principal amount.”

 

• Cross River (fintech infrastructure bank; FDIC 58410) announced expanded card issuing with American Express allowing Cross River to issue credit cards on behalf of fintech companies on the American Express network.

 

• In a continuing sign of the times…..  Boost Mobile (yes, the wireless telecom carrier) announced their new embedded finance / banking service called OmniMoney.
  • OmniMoney by Boost Mobile provides a mobile app, Visa prepaid GPR debit card (issued by Community Federal Savings Bank with Alviere as Program Manager), along with Mobile Check Deposit, and money transfer (including cross-border remittances to Mexico).

 

• Yep - ya knew it was coming – savings deposit rates are starting to increase substantially.  Take a look at Upgrade’s (alt lending platform) new Premier Savings account that launched this week sporting a very attractive 3.50% APY with no fees and no cap (minimum deposit required of $1,000).  CNBC has a good article that also shows LendingClub Bank (fka Radius Bank) advertising the 2nd highest high-yield savings at 3.12% APY with no fees and no cap.
  • Not lost on Uncle Sean is the fact that these two institutions have very similar beginnings.  In fact, the co-founder and CEO of Upgrade, Mr. Renaud Laplanche, was also the co-founder and CEO of LendingClub from 2006-2016 prior to starting Upgrade.

 

• Blockchain.com announced the debut of their Blockchain.com Visa® Card with a waitlist for US customers.  The Visa debit card is issued by Pathward N.A. (fka MetaBank), powered by Marqeta, and allows you to spend crypto or cash without fees and earn 1% back in crypto.

 

• Greenlight (teen / family PFM banking app) launched Greenlight Family Cash Mastercard® credit card (issued by First National Bank of Omaha and powered by Marqeta) with unlimited 3% cash back rewards that can be invested in stocks and ETF’s.

 

• Anchorage (OCC chartered qualified crypto custodian) announced Build With Anchorage.  A full-stack API-enabled crypto infrastructure platform facilitating crypto payment gateways, structured financial products, and crypto investing for fintechs, businesses, and financial institutions.
  • Yep – I guess you could now refer to Anchorage as a “Connected CaaS (crypto-as-a-service) Sponsor Custodian”….  😲  That’s cool!

 

• Amazon announced that it will begin offering Venmo as a payment option at checkout.  When paying with Venmo on Amazon, customers can use their parked Venmo balance, a linked bank account, or eligible debit card to complete the payment at checkout.  Amazon plans to have the Venmo payment option available to all US customers by Black Friday.

 

• Notable FinTech funding for the week:
  • Neural Payments (P2P solution and intelligent secure payments ecosystem for financial institutions) raised $8M in Series A funding round.  Some really good folks over there - check them out at neuralpayments.com.
  • Finexio (B2B A/P Payments-as-a-Service) raised $35M in Series B funding.
  • Merge (unified API for HR integrations) raised $55M in Series B funding round.
  • ConnexPay (connected payments ecosystem, making and receiving payments in one platform) raised $110M in growth equity financing to drive international expansion and enhance their innovative payments platform.
  • Bilt Rewards (co-branded card and rental rewards platform) $150M in growth equity round pushing the valuation to $1.5B.

 
 
Random Uncle Sean Stuff:

• Congrats to the Houston Astros and the Philadelphia Phillies for making it to the 2022 MLB World Series – Game 1 begins tonight on FOX!!!  GO ‘STROS!!!!
• The deal is done.  Elon Musk now owns Twitter.  So, REMEMBER – if you own a Tesla, don’t tweet anything bad about @elonmusk or your car “magically” might not start – LMAO!!!!!
• Don’t forget that Monday is Halloween!  It is one of Uncle Sean’s favorite Holidays (ranks right up there with Thanksgiving and just behind Christmas and Independence Day).  We generally have a ton of trick-or-treater’s so me and Aunt Patty will set up a table and chairs right in the middle of the driveway and sit outside for hours handing out candy.  We have tiki torches, several buckets full of candy, and Halloween theme music in the background (and a discrete adult beverage or two to share with some of our neighbors).  Covid really slowed things down, but last year was great and we are hoping for an even bigger turnout this year!    
• Of course Uncle Sean has to finish this week with some spooky / goofy themed Dad Jokes as we close out October:
  • Mummies don’t like to take time off because it is not safe for them to unwind…
  • Zombies prefer finger food as an appetizer…
  • Always hire “ghostwriters” to write jokes about Halloween (see what I did there – LOL)!!!  😊
  • If you teach a wolf to meditate, then that wolf becomes aware wolf….  Aunt Patty rolled her eyes at that one – to which I naturally interpreted as a nod of approval!  HAHAHA!!!
    • Speaking of Aunt Patty….  I told her that I thought I saw a cockroach in the kitchen so I cleaned and scrubbed everything really well….  The next day I overheard her telling her sister that she was going to put that cockroach in the bathroom next.  Ahhh - touché Aunt Patty, touché - LOL!!!!!  😝

 
 
Have a GREAT weekend, please stay safe, and have a HAPPY HALLOWEEN!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at [email protected] | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | [email protected] #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.