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Bulletin

Uncle Sean's Update - 8/13/21

8/13/2021

 
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Happy Friday the 13th!!!
 
Here is the Uncle Sean Update for 8/13/21:
 
  • JPMorgan Chase launched a real-time payments option called "request for pay" that enables “corporate clients to send payment requests to the bank's roughly 57 million retail clients who use its app or website, cutting the cost and time it takes for those companies to get paid”. 
    • I admit it, at first I laughed thinking “all I have to do is delete the message” – LOL.  However, this does make sense when you think about transactions that still occur with a check including most business accounts payable and many retail B2C service transactions (home and auto repairs, etc.).  For example – I have a propane tank that I use to heat my house.  The vendor that I use to fill my tank charges a 3% fee for card payments (hey that 3% fee on my 500 gallon tank is enough to buy Uncle Sean a case of beer), so I always just write them a check.  Each time that check takes about a week to clear my account.  Which means that the JPM RTP payment solution would benefit that vendor a full weeks worth of cash flow for every transaction.
 
  • Six months after initial application for a bank charter, Brex has withdrawn their ILC Charter application from Utah DFI and FDIC in order to “modify and strengthen” their application and “resubmit at a later date.”
 
  • Alchemy Pay announced Virtual Crypto Mastercard and Visa Card Services converting crypto to fiat to “speed up the use of cryptocurrencies in the payments sector.”  Currently undergoing beta testing in multiple key markets, the company expects the virtual card services to be fully launched at the end of 2021 or early 2022.  According to this PYMNTS.com article, Alchemy Pay “plans to offer its virtual card services as a full suite white-label service to crypto projects and businesses as well as traditional institutions looking to integrate crypto-related solutions.”
 
  • There was a host of M&A activity this week:
    • Paymentus (NYSE: PAY) announced an agreement to acquire Payveris for $152.2M in a mixed deal of approximately 56% in cash and 44% stock.
    • Robinhood paid $140M to acquire Say Technologies in an all-cash transaction.
    • Truist paid $2B to acquire Service Finance (POS lender for the home improvement industry).
    • Zilch (UK BNPL) enters the U.S. market by announcing an agreement to acquire NepFin (marketplace lender for SMB’s).  Unlike other BNPL firms, Zilch “allows customers to pay in interest-free instalments at any online retailer where Mastercard is accepted, not just the ones supported by its platform.”
    • U.S. Bank strengthens their SMB banking business by acquiring fintech challenger Bento for Business.  Food for thought - It will be interesting to see how they integrate Bento AP payments into / alongside their existing Elavon card and mobile-wallet receipts platform.
    • We saw a couple of CU acquisitions of banks (and I am hearing that there are more to come).  A quick look at the FedFis Bank M&A database (yep – that’s a plug) shows that this totals 8 CU acquisitions of a bank this year and the third deal in the last 7 days (WOW):
      • Orion Federal Credit Union (Charter #24831; $1.02B Total Assets) announced an agreement to acquire Financial Federal Bank (Cert #31840; $751M Total Assets).
      • Royal Credit Union (Charter #66834; $3.76B Total Assets) announced an agreement to acquire Lake Area Bank in Minnesota (Cert #1390; $438M Total Assets).
 
  • Frich (social finance app) goes live in the US.  Here are some Uncle Sean revelations (give us a shout if you need some research / analysis done):
    • Frich has a Mastercard debit card coming soon (unknown who the issuer is just yet) and they are using Sila for infrastructure KYC and EFT / ACH.  Sila in turn is partnered with Evolve Bank & Trust (similar to how Dwolla uses Veridian Credit Union).
 
  • ZenBusiness (fka Joust) launched ZenBusiness Money and “includes capabilities to send and customize invoices, accept credit card and bank transfer payments, and manage income with a dashboard across users’ mobile, tablet and desktop devices” to their nearly 200,000 customers.
 
  • Paypal announced that their Venmo Credit Card now has Cash Back to Crypto rewards feature described as “a new way for Venmo Credit Card customers to automatically purchase cryptocurrency from their Venmo account using cash back earned from their card purchases.”
 
  • Plaid forks out a cool $58M to settle data privacy case claims that Plaid used consumers’ banking login credentials to gather and distribute detailed financial data without their consent.  If you really want to, you can read the 45-page settlement memo here.  To be fair, here is Plaid's response and continued commitment to consumer privacy.
 
  • Poly Network (protocol for swapping tokens across multiple blockchains) gets the dubious distinction of experiencing the largest DeFi hack thus far at $611M in crypto stolen - but this story gets interesting quick.  Pretty much all of the $611M has been returned and the hacker claims they carried out the theft “for fun” and that it was “always the plan” to eventually return the funds (yeah, right).  There is significant speculation that the hackers began returning the stolen crypto because they were discovered (or were very close to being discovered) by blockchain security firm Slowmist.
 
  • Circle announced their plans to file to become a national digital currency bank and operate under the supervision of the Federal Reserve, U.S. Treasury, Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) which appears to be way beyond just a National Trust charter.  This may be a preemptive maneuver anticipating significant regulatory oversight in the very near future (see SEC seeks more regulatory authority over crypto as well as Fed Reserve calls for stronger regulatory framework around stablecoins); or possibly a marketing response to the brutal Paxos blog a few weeks ago (specifically calling out Circle) showing the differences in stablecoins and the need for consistent regulation (Paxos stablecoins reserved at 96% cash and 4% US Treasuries whereas Circle USDC reserves at 61% cash, 13% Yankee CD’s, 12% US Treasuries, and 14+% in commercial paper, corporate and muni bonds).  My gut tells me it’s both.
 
  • Brian Brooks (former head of the OCC) resigned as Binance.US CEO just three months into the job citing “differences in strategic direction.”
 
  • Fintech funding continues to run hot this week:
    • Canopy raised $15M Series A funding round after experiencing 4.5X customer growth in the first half of 2021.
    • FalconX (crypto trading platform) raised $210M in Series C at a $3.75B valuation. 
    • Gusto (payroll, HR, and benefits platform) raised $175M in Series E with a $9.75B valuation (according to Forbes) and touting over 200,000 business customers.  
    • Tessian (cyber security) raised an additional $9M Series C extension (to $74M total).
    • Upgrade (online lending platform) raised $105M in Series E funding round with a valuation of $3.325B.
    • Trust (corporate card + marketing community platform) raised $9M Seed Round.
    • TaxBit (tax and accounting software for crypto) raised $130M in Series B funding round with a $1.33B Unicorn valuation.  Since their last funding round in March, “the company has tripled its headcount to about 100 people, launched an office in Seattle, deployed services with the IRS and inked partnerships with a number of digital asset platforms” including Coinbase, BlockFi and Gemini.
    • Klover (wage advance ad-tech platform) raised $60M in Series A funding.
 
  • We lost the legendary football coach Mr. Bobby Bowden this week.  Quite possibly the only thing that eclipses his hall of fame coaching career is the almost endless comments about how great of a person he was outside of coaching with the mantra “faith, family, football.”  Here are some very good articles regarding Bobby Bowden’s life and career from ABC news and CBS Sports.
    • Couple of quick stats – 377 total wins and two national championships.  His 34-year tenure at Florida State included 12 ACC titles and an incredible 14 straight seasons (1987 – 2000) where FSU finished in the AP top 5. 
 
 
Random Uncle Sean Stuff:
  • 14 days until college football!!!
  • Strange factoid – did you know that rabbits can’t puke?  Seriously - their digestive system only goes one way, so they eat plenty of roughage, which keeps things moving in the right direction.  You’re welcome!  LOL!!!!
  • And a couple of quick Dad Jokes for you:
    • Not to brag too much, but I got the high score on my scale today!
    • If there was a pill to cure procrastination, I’d probably take it tomorrow…
    • Aunt Patty suddenly turned to me and said, “you weren’t even listening, were you?”  And I thought to myself, “well that’s an odd way to start a conversation.”  Hehehehehe!!!!
 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #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.

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