Category Archives: Enterprise

Visa Grants Coinbase Power To Issue Bitcoin Debit Cards

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Forbes | Michael del Castillo | Feb 19, 2020

Coinbase crypto visa payments - Visa Grants Coinbase Power To Issue Bitcoin Debit CardsCredit card giant Visa has granted its principal membership to a cryptocurrency company for the first time. Officially awarded to cryptocurrency exchange Coinbase in December, but not revealed to the public until today, the membership cuts out a crucial, and expensive middleman from the process of issuing a debit card that lets users spend their own bitcoin, ether and XRP anywhere Visa is accepted.

Perhaps even more importantly though, the principal membership makes Coinbase the first cryptocurrency company with the power to issue debit cards for others, including other cryptocurrency companies and more traditional firms alike. Visa confirmed it granted Coinbase the principal membership, clarifying that the company itself won’t actually accept cryptocurrency when the project goes live later this year.

See:  Visa R&D Arm Develops a Blockchain System That Could Replace Financial Data Aggregators

While Coinbase says it’s not planning on issuing cards to others anytime soon, the principal membership status marks a potentially important new revenue stream for the company, which Forbes estimates saw a 40% decline in earnings last year.

By simplifying the process of spending cryptocurrency anywhere Visa is accepted, the membership also lays the foundation for a potential explosion of cryptocurrency being used to buy everyday items, regardless of whether the merchant itself accepts cryptocurrency.

“Your Bitcoin holdings have never been liquid because you have to sell them, you have to go through a process, withdraw the money, and then spend it. It's never been an instant, "Oh, I'll buy this cup of coffee with bitcoin," says Zeeshan Feroz, CEO of Coinbase UK, which received the membership. “What the card is trying to change is the mindset that crypto is tucked away, takes two days to access, and can actually now be spent in real time.”

Managed by Coinbase’s fully-owned U.K subsidiary, based in London with offices in Dublin, the card that automates the conversion of cryptocurrency into whatever currency the merchant accepts will be available in 29 countries when it is first issued later this year, including Denmark, Estonia, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, and the U.K.

The Coinbase Visa debit card will not be available to U.S. residents. Further simplifying the process of actually spending cryptocurrency, the nine assets available on the card, also including litecoin, bitcoin cash, Brave’s BAT, Augur’s REP, 0x’s ZRX, and Stellar’s lumen, won’t likely be subject to unwieldy capital gains taxes at the point of sale. Unlike the U.S., the E.U. doesn’t require spenders pay additional tax on the difference in price based on when a cryptocurrency was purchased, and when it was spent.

See:  With Plaid Acquisition, Visa Makes a Big Play for the ‘Plumbing’ That Connects the Fintech World

Feroz says direct access to the Visa network gives the cryptocurrency exchange more flexibility in the business models it pursues. A previous Coinbase Visa card was issued in April 2019 by financial services firm Paysafe Group Holdings Limited, which vets its customers, including corporate spending firm Soldo and mobile banking app Lunar, and charges a fee for the service.

“You have a dependency on their risk appetite and the models they'd like to work with,” says Feroz. “Direct membership allows us to take control of our issuing program.”

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NCFA Jan 2018 resize - Visa Grants Coinbase Power To Issue Bitcoin Debit Cards The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Why LendingClub’s Acquisition Of Radius Bank Is A Smart Deal

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Forbes | Ron Shevlin | Feb 21, 2020

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LendingClub, one of the nation’s first peer-to-peer lenders (oops! I mean, “marketplace” lenders—real ”peer to peer” lending lasted all of about a month), announced it plans to acquire Radius Bank, a relatively small Boston-based bank, unknown to most people outside of the industry (and within, for that matter).

The press release announcing the pending deal contained the usual platitudes from the acquiring CEO:

“This is a transformational transaction that allows us to reimagine banking in a way that is free from legacy practices and systems. We will create a category-defining experience for our members that will dramatically enhance the resilience and earnings trajectory of our business.”

Despite the buzzword-laden proclamation, this acquisition makes a lot of sense for both parties for reasons that go beyond what many observers have reported on.

The Short-Term Benefits Aren’t About Radius Bank

Much of the discussion about the deal has focused on the obvious and shorter-term benefits of the acquisition, including a more stable source of funding and a $40 million reduction in bank fees and funding costs, both of which will help boost the spread Lending Club earns on the loans it keeps on its balance sheet.

If that was the only impetus for the acquisition, however, LendingClub could have acquired WebBank, the current issuer of loans through LendingClub’s platform.

Or it could have acquired any number of banks with a bank charter, no?

Radius Bank is a Strategic Acquisition

Lending Club went after Radius for a higher purpose: Its APIs and banking-as-a-service business.

See: 

Lending Club’s long-term vision is to become what it calls a “marketplace” bank. In my terminology, that means pursuing a platform strategy: attracting both buyers and sellers (borrowers/savers and lenders/investors) and providing transaction integration and processing capabilities.

Amazon is a great example of a successful platform strategy: It makes money by serving both buyers and sellers, and in fact, there doesn’t seem to be any limit to how much Amazon can make by increasing the services (e.g., AWS) it provides to the merchant side of the coin.

It’s the same with LendingClub.

Yes, LendingClub wants (needs) to expand beyond being just a monoline lending provider. It could have achieved that goal by acquiring any bank willing to sell itself to the company.

With Radius Bank’s APIs—and fintech relationships—LendingClub takes a big step forward towards becoming a multi-line platform, and not just a multi-line bank.

Many banks are falling over themselves trying to partner with fintech companies. In its latest survey, Cornerstone Advisors found that 70% of financial institutions consider fintech partnerships to be an important aspect of their 2020 strategies.

For better or worse, many are focusing their partnership efforts on digital account opening instead of product and service expansion.

LendingClub’s acquisition of Radius leap frogs a lot of those institutions.

See:  Citibank to Save $600 Million in 2020 Through Digital Investments

Through its banking-as-a-service offering, Radius brings relationships and integration with firms like Brex, MaxMyInterest, Aspiration, NerdWallet, Stackin’, FutureFuel, and NorthOne.

Any bank can provide a charter. Not any bank can provide those relationships. And not any bank can bring to the table the APIs that Radius has already developed. With the exception of the largest banks, most banks are playing catch up on the API front.

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NCFA Jan 2018 resize - Visa Grants Coinbase Power To Issue Bitcoin Debit Cards The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Another record breaking year for Canadian VC as AI, FinTech, cybersecurity reach new heights

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Betakit | | Feb 10, 2020

funding by region 2019 - Visa Grants Coinbase Power To Issue Bitcoin Debit CardsPwC Canada and CB Insights have released the MoneyTree report on Canadian investment trends for the second half and full year of 2019 (all figures in USD).

“Increased competition for funding from global investors has created a healthy funding environment for Canadian startups.”

Last year saw Canadian venture capital (VC) funding rise to a record-setting $4.1 billion. Although Canadian funding experienced an 11 percent decline in deal count last year, the report tracked a 16 percent increase in year-over-year funding. Some massive rounds from last year were not included in this year’s report, including Verafin’s round, as the company did not disclose the debt and equity break out, and Sonder’s $210 million raise as the company is now headquartered in the United States.

A strong year for AI, FinTech, cybersecurity

Artificial intelligence companies saw increased investor attention in 2019, investment in Canadian AI companies more than doubled in the second half of 2019.

Last year’s funding to Canadian AI companies saw a 49 percent year-over-year increase in 2019 to $658 million with deal count reaching a new record at 57 deals.

See:  The paradox of 2020 VC is that the largest funds are doing the smallest rounds

This doubling of investment in the sector represented a 176 percent half-over-half increase compared to the same period in 2018. Although there was a jump in dollars invested, there was a slight decline in deal count, which the report said reflects the rise of larger deals in the sector. Element AI’s $200 million CAD Series B was among the top five largest VC rounds of the year.

“Deal share by stage to Canadian AI startups suggests the ecosystem is maturing, as a number of companies have progressed from seed- to early- to expansion-stage over the past few years,” the report noted.

FinTech companies also saw a striking rise in funding, as well as deal activity, raising $776 million in 2019, a 104 percent boost from 2018. Deal count in the FinTech sector rose to 59, up 11 percent year over year.

“There’s a strong link between well-funded FinTech companies and strategic channels [and] partnerships with the larger banks,” said Eugene Bomba, partner at the national technology sector at PwC Canada.

The cybersecurity sector also had a strong year, with $398 million deployed across 19 deals.

“Consistent with global trends, 2019 was a record year for cybersecurity funding in Canada alongside rising deal activity,” said Sajith Nair, partner at cybersecurity and privacy at PwC Canada. “From the protection of personal identity to critical company assets, funding to cybersecurity continues to rise as organizations and executives grasp the importance of preventative and detective measures in order to avoid a major crisis and build digital trust.

See:  Corporate venture capital deals hit new record as banks invest in fintech competitors

Investment activity in the Canadian digital health space declined marginally in 2019. Digital health companies, in particular, saw a reduction in both financing and deal count last year, with invested capital falling 26 percent year-over-year and deal count dropping 14 percent.

“The complexity of payer models and procurement cycles in digital health continues to be a challenge to growth and adoption in Canada,” said Cameron Burke, managing director of the technology sector at PwC Canada. “The fact that health and wellness made up over 50 percent of H2 2019 deals reflects that complexity and capital is going towards a simpler growth strategy.”

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NCFA Jan 2018 resize - Visa Grants Coinbase Power To Issue Bitcoin Debit Cards The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Samsung Is Quietly Becoming A Major Bitcoin, Crypto And Blockchain Player

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Forbes | Billy Bambrough | Feb 18, 2020

Samsung - Visa Grants Coinbase Power To Issue Bitcoin Debit CardsSamsung, the South Korean technology giant and creator of the Galaxy smartphone range, could soon become one of the biggest drivers of bitcoin, crypto and blockchain adoption.

While bitcoin traders and investors are focused on the upcoming bitcoin halving, a looming U.S. bitcoin crackdown, and rocky crypto trading volume, Samsung is putting the power of bitcoin, crypto and blockchain in people's hands.

Last week, Samsung, which makes up 19% of global smartphone sales and last year sold almost 300 million phones according to data site Statista, unveiled it latest Galaxy smartphone range with its new flagships the S20, S20+ and S20 Ultra models.

These new 5G enabled smartphones build on the Galaxy S10 ranges' bitcoin, cryptocurrency and blockchain support, which last year was revealed to boast a built-in bitcoin and cryptocurrency wallet.

"We created a secure processor dedicated to protecting your PIN, password, pattern, and Blockchain Private Key," Samsung wrote on its website, announcing the new S20 Galaxy phones. "Combined with the Knox platform, security is infused into every part of your phone, from hardware to software. So private data stays private."

Samsung's so-called Blockchain Keystore was introduced last year, initially with support for ethereum and other ERC-20 tokens, but adding bitcoin in August.

Those using Samsung devices with the Blockchain Keystore are able to store the private keys to their bitcoin and crypto wallets on the device.

See:  New Samsung Galaxy S10 Includes Cryptocurrency Key Storage

Control over a wallet's private keys is often cited as one of the most overlooked and important aspects of bitcoin and cryptocurrencies, with many of the biggest crypto exchange hacks and thefts happening because people fail to store their tokens in wallets they have the private keys for.

If bitcoin or cryptocurrencies are stored on a smartphone-based wallet that gives users control over their private keys it removes reliance on external exchanges.

Bitcoin and cryptocurrency adoption has fallen short of expectations in recent years, with some predicting that bitcoin and other cryptocurrencies would be widely used by 2020 following bitcoin's epic 2017 bull run.

However, technology and user experience developments from the likes of Samsung and micro-blogging platform Twitter could help the bitcoin and crypto industry drive adoption.

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NCFA Jan 2018 resize - Visa Grants Coinbase Power To Issue Bitcoin Debit Cards The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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HSBC launches Treasury APIs for business clients

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Bank Innovation | Rick Morgan | Jan 22, 2020

bank innovation - Visa Grants Coinbase Power To Issue Bitcoin Debit CardsHSBC is improving payments for its business clients through a suite of tools launched last week called Treasury APIs, which are designed to speed up payments for small businesses and large corporate clients alike. 

HSBC’s Treasury APIs embed payment capabilities into other workflows. According to the bank, this allows treasurers to make payments from their own workstations without logging into a proprietary bank platform. Clients receive confirmation that a payment request has been received and can track payments from their accounts to recipients.

Nadya Hijazi, head of digital, global liquidity and cash management at HSBC, said clients using the tool include e-commerce platforms, treasury teams and mutual fund teams. 

The new products let HSBC business clients pay suppliers more quickly; Hijazi said payments that used to take anywhere from one or two days in the past now take about 10 or 20 seconds. 

HSBC, which is headquartered in London, has $2.7 trillion in assets. Treasury APIs are now available in 27 markets throughout Asia, Europe, the Middle East and the Americas. The bank piloted the tools in India last summer. 

See:  HSBC Canada Breaks from Big Six Banks in Call to Encourage Fintechs

In addition to paying suppliers, HSBC business customers can also issue refunds to customers with speed and efficiency. In the past, e-commerce platforms would have to wait until the next day to refund customers, but HSBC’s new tools allow clients to refund customers in real time. Treasury APIs connect business clients’ banking data directly to back-office systems and clients can also view their liquidity positions in real time, without having to wait until the end of the business day.  

Other banks are also working to improve the payments experience for business clients. In September, BNP Paribas partnered with Kantox to help corporations automate foreign exchange transactions. Meanwhile, Citibank recently partnered with HighRadius to speed up cross-border payments for its corporate clients. And last summer, American Express acquired business-to-business payments company Acompay to eliminate pain points for its corporate clients.  

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NCFA Jan 2018 resize - Visa Grants Coinbase Power To Issue Bitcoin Debit Cards The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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HSBC Canada Breaks from Big Six Banks in Call to Encourage Fintechs

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The Logic |By Zane Schwartz | Feb 12, 2020

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While Canada’s Big Six banks urge caution about the introduction of open banking, the Canadian subsidiary of U.K.-based multinational HSBC wants the federal government to require banks to share information with the fintechs trying to compete with them.

In a February 2019 submission to the finance department’s advisory committee looking at open banking rules, recently made public, HSBC Canada CEO Sandra Stuart requested the government introduce legislation mandating “open banking.”

The call comes as the Big Six banks are urging caution on open banking. HSBC Canada is the only foreign bank or subsidiary to make public its submission to the committee.

 

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NCFA Jan 2018 resize - Visa Grants Coinbase Power To Issue Bitcoin Debit Cards The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Banks, fintech startups clash over ‘the new oil’ — your data

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Politico | Victoria Guida | Feb 7, 2020

JP Morgan - Visa Grants Coinbase Power To Issue Bitcoin Debit CardsFintech companies argue that giving banks a tight grip over the flow of information will allow the big lenders to snuff out new competitors.

The nation’s banks are locked in a bitter fight with upstart technology companies over the control of their customers' financial data — and the consumers whose personal information is at stake are mostly spectators.

JPMorgan Chase, PNC and other major lenders are threatening to limit the access of middlemen that are hired by financial apps like Venmo and Betterment to grab customers' account information from the banks' websites. The banks warn that financial information is less secure in the hands of these data aggregators, a worry shared by federal investigators, and that there are few controls over the sale of the information to third parties like hedge funds.

See:  Minister Morneau announces second phase of open banking review with a focus on data security in financial services

For their part, financial technology companies argue that giving banks a tight grip over the flow of information will allow the big lenders to snuff out new competitors and make it harder for customers to compare rates and prices for different services.

The ability to maintain access to that data is so valuable that the powerful middlemen, which work on behalf of thousands of financial apps, are doing something that companies almost never do: asking the government for more oversight to prove that they are responsible handlers of sensitive data.

“Data is the new oil,” said Linda Jeng, a senior fellow at the Georgetown Institute of International Economic Law and a former Federal Reserve official.

“If you have access to data, then you have the ingredients to build better services.”

The conflict is part of the existential challenge that the fintech upstarts are posing to banks and their record profits as they increase the speed and convenience of transferring money or getting mortgages approved. Much of the battle is over information, and it has escalated in the absence of government rules establishing that customers themselves control their own personal data, as in the European Union.

The dispute, brewing for some time, is now spilling out in the open. JPMorgan Chase is making moves to cut off the ability of data aggregators to obtain customer data without the bank’s consent.

See:  Fintechs divided on screen scraping ban

The middlemen — called “screen-scrapers” because of the way they get the data — include Plaid and Yodlee, which most payment app users might not even know exist. They use a consumer’s bank username and password to pull account information, a right that people sign over to the digital payments companies when they do business with them, giving the aggregators the ability to grab more data whenever they like.

The aggregators have access to any data that the customer can see when they log on to their bank's website — account balances, transaction data, mortgage information.

JPMorgan wants to require companies to negotiate a standardized set of data fields that they can request. In December, it reached a deal with Yodlee to that end and has previously struck agreements with other aggregators.

"We want to protect our customers’ financial data while giving them more visibility and control when using the financial apps," said Paul LaRusso, managing director of digital platforms at JPMorgan Chase.

Meanwhile, PNC has already started restricting the information that aggregators like Plaid can get using customer-provided login information.

“PNC’s goal is to accommodate our customers’ choice to connect to the fintech apps they want to use while also ensuring that those connections are made safely and securely,” said Karen Larrimer, PNC’s head of retail banking.

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NCFA Jan 2018 resize - Visa Grants Coinbase Power To Issue Bitcoin Debit Cards The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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