Uncle Sean's Update - 9/16/22

Happy Friday!!!
 
WHOA NELLIE (in my best Keith Jackson voice) – what a busy week!  Here is the Uncle Sean Update for 9/16/22:
 

• With all eyes on ‘Powell & Co.’ for the FOMC meeting next week, August CPI came in hotter than expected at an annual rate of 8.3% with Core CPI at 6.3% (estimate was 8.1% and 6.1% respectively) with increases in shelter, food, and medical care - even as gas prices fell 10.6% from the prior month.  Yep, Uncle Sean is feeling it too; and it sucks!!!!  ☹

 

• Meanwhile, Goldman Sachs credit card business, anchored by the Apple Card and the GM card to a lesser extent, showed loss rate on credit card loans of 2.93% for 2Q.  “That’s the worst among big U.S. card issuers and ‘well above subprime lenders,’ according to a Sept. 6 note from JPMorgan.”  YIKES!!!

 

• No real surprise that the CFPB is looking into Reg E, but American Banker (behind a paywall so I won’t post the actual link) is reporting that CFPB Director Rohit Chopra said in a speech Wednesday that the level of PTP fraud is “frightening” and specifically called out providers such as Zelle, PayPal Venmo, and others – again…  😲

 

• Speaking of….  The CFPB released their comprehensive report on BNPL financing (83 pages) from information obtained by Klarna, Affirm, Afterpay (Block), PayPal, and Zip.
  • Key points – the five biggest BNPL firms issued 180M loans totaling $24B in financing last year.  This is up more than 10x from 16.8M loans in 2019 worth $2B.
  • Look for more regs to come as the agency is considering interpretative guidance and supervisory examinations of BNPL programs.

 

• The White House released the expected Comprehensive Framework for Responsible Development of Digital Assets with an emphasis on risk / regulation, crime, and enforcement actions to protect consumers.

 

• One (Walmart fintech with banking services provided by Coastal Community Bank) will be introducing checking accounts as a beta to thousands of Walmart employees and a small percentage of its online customers in the coming weeks; with plans to make the accounts available to Walmart’s 1.6M employees (WOWZA) within a year before making the services available more broadly.

 

• Adyen becomes the first financial technology platform to launch Cash App Pay outside of the Block ecosystem.  This allows Adyen’s business customers be able to begin accessing Cash App Pay as an integrated payment method for their U.S. customers online shortly and in-store next year. 

 

• Modern Treasury (business payments operations software) partners with Goldman Sachs Transaction Banking (TxB) to provide embedded payments to corporate customers.

 

• JPMorgan Chase to acquire payments fintech Renovite to enhance merchant acquiring revenue.

 

• Grasshopper Bank announced that it has received Preferred Lender Program (PLP) delegated authority status with the U.S. Small Business Administration.

 

• Bolt (one-click online checkout firm) announced the mutual termination of the merger agreement to acquire Wyre (crypto infrastructure payments firm) for $1.5B.  The merger would have produced the industry’s first one-click crypto checkout platform.

 

• ModusBox spins off PortX Inc. as an independent entity with an additional $10M in Series A extension.
  • PortX is “a technology company focused on financial services integration software that unlocks access to banking core data, eliminates vendor dependencies, and enables embedded banking-as-a-service solutions.”

 

• NCR Corporation (NYSE: NCR; enterprise technology provider to banks, retailers and restaurants) announced it will split two independent, publicly traded companies - one focused on digital commerce, the other on ATMs.  Expected to be completed by the end of 2023.  Check out the investor deck detailing:
  • CommerceCo as a leading digital commerce business at the forefront of secular evolution in retail, hospitality, and digital banking industries.
  • ATMCo as the leading global ATM-as-a-Service and ATM network business.

 

• Bottomline acquires Nexus Systems further deepening Bottomline’s business payments reach in the real estate and property management industries.

 

• Citizens Financial Group (NYSE: CFG) announced an agreement to acquire College Raptor, an online college planning platform, to supplement Citizens existing student lending and refinance business.

 

• Wow, here’s some big news in the Investment Banking world - ProBank Austin is being acquired by Forvis (top 10 accounting and advisory firm created by the recent merger between BKD and DHG) effective Oct 1, with the exception of the ProBank Austin Investment Banking Group (led by FI industry veterans Craig Mancinotti and Rick Maroney) which will be joining Hovde Group – also effective Oct 1. 
  • Congratulations are in order for Craig Mancinotti and Rick Maroney who will be Senior Managing Directors in Hovde’s Depository practice.  The additions to the Hovde investment banking team also include Mike Moran, Managing Director, and four additional investment banking professionals.

 

• Marqeta (modern card issuing platform) teams up with Bread Financial (NYSE: BFH) to launch an in-store and online, one-time use virtual card at participating retailers for a frictionless checkout experience.

 

• Mercury launches corporate credit card called IO (Mastercard CC issued by Patriot Bank) to help start-ups scale their business.

 

• KlariVis (enterprise dashboard and analytics solution for financial institutions) continues to see rapid growth and announced a new customer agreement with First Farmers Bank & Trust Co., a $2.5B community bank headquartered in Indiana with additional branch footprint in Illinois.  Check out the KlariVis platform here – looks cool!

 

• Abrigo and Encapture partner together to help financial institutions manage and streamline the commercial loan underwriting process.

 

• Atomic (payroll connectivity) partners with Hydrogen (embeddable fintech infrastructure) to allow Hydrogen customers to integrate Atomic’s feature set for employers, employees, gig-economy workers, and payroll providers.

 

• Notable FinTech funding for the week:
  • Power (fintech infrastructure; a full-stack next-gen credit card issuance platform), led by fintech veterans Randy Fernando (Azlo, Acorns, Vault) and  Andrew Dust (Amount, Acorns) emerged from stealth after raising $316M in capital consisting of a $16.1M Series A and a $300M credit facility. 
    • Power CEO, Randy Fernando told TechCriunch, “My belief is that over the next several years, consumers will go from banking with fintechs to banking with their favorite brands.  That is the vision we are building at Power — building modern fintech to power commerce.”
  • Cledara (SaaS subscription mgmt. platform – includes virtual business credit card as embedded finance solution) raised $20M in Series A funding round to further US expansion.
  • Ratio (embedded BNPL and sales financing for SaaS companies) emerged from stealth and announced $411M in capital consisting of an $11M in venture funding and a $400M credit facility for customer financing.
  • Kafene (point-of-sale lease to own financing option) raised $18M in Series B finding round.
  • Majority (neo immigrant bank) raised $37.5M in capital consisting of $30M in Series B plus another $7.5M in debt financing just nine months from their Series A round.  Valuation was not disclosed but the company stated 5x revenue growth over the past year.
  • SavvyFI (employee benefit program for college savings and student loan payments) raised $4.9M in Series A round.
  • Denim (fka Axle Payments – payment platform for freight and logistics) raised $126M in capital consisting of $26M in Series B and $100M in debt financing.
  • Payall (bank processor for cross-border payments) raised $10M in Seed round led by a16z to enable banks to “compete and win against fintechs.”

 
 
Random Uncle Sean Stuff:

• Special HAPPY BIRTHDAY wishes go out to our very own Mr. Tanner Mayo!!!!  It has been claimed that Tanner was actually born with a full beard…  And rumor has it that if you were to somehow succeed in shaving his beard off, it would spontaneously regenerate overnight!  Chuck Norris told me that he wishes he had ‘beard game’ like Tanner.  Santa Claus has Tanner beard envy.  The real reason Sasquatch hasn’t been photographed is because he is too embarrassed and intimidated to show his face since he saw Tanner’s beard.  HAHAHAHAHA – Happy Birthday buddy – we love you!!!! 😊
• And more Dad Jokes!!!!
  • If newly appointed King Charles III learns to play the guitar, wouldn’t he be the artist formerly known as Prince????
  • Do ranchers buy cows from a cattle log?  Also, if you are dressed like a cowboy you are, in fact, ranch dressing….
  • Why did the chicken join the gym?  To work on his pecks!!! 😝

 
 
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.