Uncle Sean's Update - 9/3/21

Happy Friday & Happy Labor Day Weekend!!!!
 
Don’t forget to click here to subscribe to the Uncle Sean Update and get it delivered to your inbox each week – all the cool kids are doin’ it!!!  Here is the Uncle Sean Update for 9/3/21:
 

• Amazon taps Affirm to offer BNPL feature to the AMZ shopping cart at checkout for orders greater than $50.  Currently testing with select Amazon customers, but is expected to be widely available soon (just in time for Christmas – CHA-CHING!!!!).  PYMNTS.com has a good write-up reminding us that Affirm now touts Amazon AND Walmart as BNPL customers.  That’s stout!!!

 

• Some Food for Thought…..  Even though not specifically FinTech (yet), I found Apple’s announcement this week to add driver's license and state IDs to Apple Wallet for iPhone and Apple Watch to use at security at participating airports to be very, very interesting….  
  • Could this move into the banking and fintech space as eKYC and/or online identity verification???  Could this be a tech enabler to the White House EO for consumer banking data portability???  This gets even more compelling when you consider industry claims that Apple’s payments accounted for 92% of all mobile wallet debit transactions in the U.S. during 2020.  I guess we will just wait and see.

 

• Celtic Bank announced a New "Recurring Revenue" Loan Offering.  This is an expansion of their debt financing offerings targeting growth stage tech companies that are “not well suited for traditional loan products given the nature of their business models.” 
  • If this sounds risky to you (lending based on recurring revenue as opposed to collateral / equity), then you are not alone.  Additionally, for us “white-haired” folks, it smells a lot like receivables factoring (which still carries a slight negative connotation for credit superfreaks such as myself).  However, keep in mind that this loan program is NOT designed for anyone & everyone.  Celtic mitigates this risk by targeting “mission critical” tech customers with solid contractual / subscription revenue models that are looking at a “two to four-year horizon on a liquidity event.  Ideally, this is one of the last tranches of capital to be raised to get them to a liquidity event.”
  • Now that sounds better…  Uncle Sean would not be surprised if Celtic rolls this out as a Sponsor Lender platform for other non-bank / fintech lenders looking to expand / offer revenue financing programs (especially considering that Celtic is already well versed as a Sponsor Bank in the BNPL, Credit Card, and Business Lending space).

 

• I know we have covered this a couple of times over the last few months, but it is live now – Walgreens announced the official launch of their bank account and debit card with rewards platform dubbed Scarlet; and it’s pretty cool:
  • Mastercard debit card issued by MetaBank (sponsor bank) with Allpoint ATM network.
    • Debit rewards (must be a myWalgreens member) include 5% Walgreens Branded products; 3% all other Walgreens store purchases; 1% everywhere else Mastercard is accepted.
  • Mobile App features include: account text alerts, budget and goal setting, and subaccount structure (with up to 4 subaccounts – each with their own debit card that the primary user can control – think “teen banking”).  Bill Pay and Add Cash via “barcode reload” is also included in the app.
  • Mobile Check Deposit by Ingo Money (sponsor bank here is First Century Bank)
  • Yes, you can even get your paycheck up to 2 days early with Direct Deposit – but this is subject to your employer submitting to the bank 2 days before payday.
    • Recall the 8/6/21 Uncle Sean Update where I stated “RTP will kill ACH risk” - If you can’t tell, I am getting tired of hearing about early direct deposit access…  The point here is that if it is RTP, your employer will not be submitting the ACH file two days early anymore.

 

• Late last Friday, SEC Chairman Gary Gensler doubled (err – quadrupled) down on his inquiry into “gamification and behavioral prompts used by online brokerages and investment advisors” per this CNBC article.  Yep – here’s looking at you, Robinhood….  Here is the official SEC press release stating the same.
  • And if that wasn’t enough, earlier this week in an interview with Bloomberg, Gensler continued his long-standing criticism of payment for order flow (PFOF) due to “inherent conflicts of interest” and stated that a full ban of PFOF is "on the table" (for reference, Robinhood derives about 80% of their revenue from payment for order flow).  As expected, Robinhood fired back and said they would challenge a ban on PFOF in court.  Robinhood’s legal chief Dan Gallagher, himself a former SEC commissioner, went on to state, ““The idea of banning payment for order flow is pretty draconian…”
    • I think that is the grown-up, modern day version of, “oh yeah, meet me after school at the flag pole!”  FIGHT, FIGHT, FIGHT!!!
    • But don’t worry, HOOD just announced that they are planning to roll out an early access to direct deposit feature through their Cash Management product (ugh)…..  Yeah, that should fix everything – LOL!!!

 

• Square launches Invoices Plus, a new paid subscription service offering advanced features over their existing free invoice software. 

 

• Ahh Coinbase….  Late last Friday, Coinbase erroneously sent account security notifications to 125,000 customers informing them (via text nonetheless) that “your 2-step verification settings have been changed” resulting in most of those customers freaking out believing their account had been hacked.  This is fresh off of the CNBC Report earlier last week detailing 2FA hacks and “terrible customer service” at Coinbase.

 

• PayPal is allegedly looking into a stock-trading platform and recently hired Co-founder of online brokerage TradeKing, Rich Hagen, who is now the CEO of “Invest at PayPal” – a previously unreported division of PayPal.

 

• Remitly filed their S-1 showing $202M in Revenue and $9.2M Net Loss for 1H2021 and 5m customers.

 

• Revolut is planning US credit card launch later this year.

 

• Status Money to launch a cash back credit card that automatically invests rewards in cryptocurrency powered by Railsbank credit-card-as-a-service platform.

 

• Plaid and Astra announced a new partnership to enable fintech's to embed automated bank transfers (money movement).  Basically, Astra will use Plaid’s instant authentication for bank accounts to more easily facilitate Astra’s instant direct deposit switching.
  • This IBSintelligence article does a good job of explaining this new partnership – “For developers with a Plaid integration, adding Astra’s transfer automation is extremely easy. Using an instance of Plaid Link within an application, customers are able to connect their bank account and set up automated bank transfers to or from that connected account in minutes.”

 

• Notable FinTech funding updates for the week include:
  • Alpaca (equities trading software API) raised $50M in Series B funding.
  • Origin (employee financial wellness platform) raised $ $56M in Series B funding round.  Valuation was not disclosed but the company did reference 6X increase in user growth over the past 12 months.
  • Viva Finance (alt credit lender serviced through payroll) raised $6.2M in Series A funding round.
  • Hum Capital (business capital lender) raised $9M in Series A round.
  • PayEm (global spend and procurement platform) raised $27M in capital including $7M in Seed plus $20M in Series A.
  • Corelight (cybersecurity – Network Detection and Response platform) raised $75M in Series D.
  • Point (neo/challenger - debit rewards app) raised  $46.5M in Series B funding round.
  • HomeLight (proptech platform) raised $363M in total financing including $100M in Series D plus another $263M in debt financing at a valuation of $1.6B.  HomeLight strives to “make purchasing a home easier by fronting prospective buyers the funds to make all-cash offers”; and claims to have built a “faster application and underwriting process” that allows the company to guarantee that it can close a loan in 21 days with “zero lender fees and transparent rates.”

 
 
Random Uncle Sean Stuff:

• Ahh….  Labor Day Weekend, College football, dove hunting in South Central Texas….  But it’s STILL 100 DEGREES!!!!!  I’m so ready to complain about how cold it is outside – LOL!!!!
• So this absolutely cracked me up – the 70’s Swedish rock band, ABBA (yes, that ABBA – the youngest member of which is 71 now) has announced a comeback concert and a new album called “Voyage” – LOL!  The London concert is set with the band members to appear as virtual holograms of their younger selves (appropriately dubbed as “ABBA-tars”) which took about 5 weeks of performing with 160 video cameras to create.  I’m not laughing at the comeback concert itself, but rather the interview comments in this AP article which are SOLID GOLD (I absolutely love their humor):
  • “We took a break in the spring of 1982 and now we’ve decided it’s time to end it.”
  • “They say it’s foolhardy to wait more than 40 years between albums, so we’ve recorded a follow-up to ‘The Visitors.’”
  • “And also, we want to do it before we were dead.”
    • Uncle Sean is literally crying laughing at these comments!!!!  Here are a few of ABBA’s classic music videos for you to reminisce (turn the volume up; and it’s perfectly okay to dance and sing along – I did) - Dancing Queen, S.O.S., Waterloo, Take a Chance on Me
• And of course a few quick Labor Day inspired Dad Jokes for your long weekend:
  • I tried being a professional fisherman, but I couldn’t make it on my “net” income.
  • Dad always told me and Davey to “work hard until your bank account balance looks like a phone number”….  I am happy to report that I have $9.11…  I’ve made it, Dad!!!! 😊

 
 
Have a GREAT Labor Day 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.