Higher borrowing costs will test the resiliency of BNPL
Sen. Elizabeth Warren, D-MA, called the peer-to-peer payments network “unsafe,” claiming Zelle users were defrauded out of $500 million last year.
Then 2022 came
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: P2P, Lending, Digital Bonds, BNPL, Private Credit
As Interest Rates Climb and the Tide Goes Out, BNPL’s Resiliency Will be Tested
FP | | Sep 30, 2022
Higher borrowing costs will test the resiliency of BNPL
- The Bank of Canada has increased its benchmark interest rate three percentage points since March and governor Tiff Macklem has been clear he isn’t finished, as inflation is running at an annual rate of about seven per cent, too fast for a central bank that targets two per cent.
- So, higher borrowing costs will test the resiliency of BNPL, a type of credit popularized in recent years by digital upstarts that typically allows shoppers to pay four instalments at zero interest over a period of six to eight weeks.
- BNPL companies took off in the pandemic thanks in part to central banks in the United States and Europe dropping interest rates to zero, generous government stimulus that induced spending and the e-commerce boom, said Michael Taiano, senior director at Fitch Ratings Inc.
See: CFPB to Regulate BNPL Like Credit Card Firms
- BNPL lenders are feeling the heat. Stockholm-based Klarna Inc.’s latest fundraising round in July implied a valuation of US$6.7 billion, an 85-per-cent drop from US$45.6 billion in 2021, one of the clearest signs of dwindling confidence. Klarna cut staff by 10 per cent in May and announced a second round of firings in September, TechCrunch reported.
Block Completes Purchase of BNPL pioneer Afterpay
- Jack Dorsey’s Block Inc. finally brought its buy now, pay later (BNPL) service to Canada last week, eight months after buying BNPL pioneer Afterpay Ltd. for US$29 billion in January.
- Block is betting that the new interest-rate backdrop will separate the strong from the weak, as financial technology companies that are overly reliant on BNPL become prey for companies that offer a wider array of financial services.
- Canada’s major entries, PayBright and Flexiti Financial Inc., were purchased by Affirm and Wichita, Kan.-based Curo Group Holdings Corp., respectively, between December 2020 and February 2021.
See: Why BNPL Swedish giant Klarna has sights set on Canada
“We think we’re going to see consolidation,” said Alyssa Henry, who runs Square. “But I think we’re also going to see the rise of ecosystems like the ecosystem we have.”
“What gives me confidence is if you look at gen Z, they’re responding very strongly to buy now, pay later,” Lieu said.
“A lot of these BNPL providers just kind of popped up in the last couple of years when it was an attractive environment, but maybe they don’t have the business model to withstand some of the challenges that are currently present,” Taiano said.
Continue to the full article --> here
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
 |  |  |
|---|---|---|
 |  |  |
Bank CEOs Defend P2P Payments Network Zelle in Senate Hearing Over Consumer Fraud Handling
BankingDive | Anna Hrushka | Sep 23, 2022
Sen. Elizabeth Warren, D-MA, called the peer-to-peer payments network “unsafe,” claiming Zelle users were defrauded out of $500 million last year.
“You have created a perfect weapon for criminals to use and they have used it and you have not stood behind your customers,” she told the witnesses, which included the CEOs of JPMorgan Chase, Bank of America, Wells Fargo, Citi, Truist, PNC and U.S. Bank.
- Zelle, a network designed to compete with P2P fintechs such as Venmo and Cash App, is owned by six of the seven banks represented at Thursday’s Senate Banking Committee hearing.
- Senate Democrats on Thursday pressed the CEOs of the nation’s largest retail banks to answer for scams associated with Zelle, a bank-owned peer-to-peer payments network, calling for the institutions to implement policies to protect and redress customers defrauded through the platform.
See:
Asset Managers, Banks Are Tightening Controls of Communication Tools like WhatsApp
Some New Banking Rules Implemented to Protect Consumers in Canada
- In a joint letter sent to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra in April, the Democratic lawmakers called on the regulator to expand the definition of “error payments” to include payments a consumer makes to a scam artist. The lawmakers also called for the CFPB to issue guidance that would place the burden on banks to make consumers defrauded by such transactions whole.
- JPMorgan CEO Jamie Dimon, who is no stranger to fiery exchanges with Warren, said his bank reimburses customers whose accounts have been hacked, a policy banks follow under Regulation E. Anything that’s unauthorized, we do cover,” Dimon told the senator, adding the amount of fraud on Zelle is “relatively small.”
Continue to the full article --> here
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
| | |
|---|---|---|
| | |
Saddled with Rising Rates and Debt, Canadian Borrowers Seek Mortgage Alternatives
Reuters via yahoo finance | | Sep 7, 2022
TORONTO (Reuters) - In a country where the Big Six banks control 80% mortgage market share, Canada's smaller lenders are making some rare headway after the Bank of Canada's sudden and sharp interest rate increases this year raised the bar to qualify for home loans. The Bank of Canada has so far this year increased rates by 300 basis points, including Wednesday's 75 basis-point hike. That has lifted the minimum qualifying rate for the biggest banks' mortgages, set by regulator OSFI, reducing the amounts borrowers can access and leading some of them to seek alternatives.
- Credit unions' mortgage balances increased 4.1% between March 31 and June 30 [compares with 2.6% growth at the Big Six banks]. That's good news for credit unions, which hold 14% of outstanding Canadian mortgages.
- Most credit unions can take into account factors that the big banks may not consider, including variable income for self-employed borrowers and those who have stable income now but may have a limited or checkered credit history, said Michael Hatch, vice president, government relations, at the credit union association.
Watch Keith Taylor, Executive Director, DUCA: Fintech Fridays EP45: Mission-driven and Consumer-centric Financial Services
Pippa Nutt, chief marketing and member solutions officer at DUCA Financial:
We're seeing a lot more rate shoppers, so we're seeing a lot more inquiries, which has seen a 300% increase in loan growth in June from the previous year, and 27% from the prior month.
Mark Ostland, director, mobile experience, at Meridian Credit Union:
We're certainly seeing more people come over saying, 'I'm good, I'm OK, but I failed the stress test'. Their financial profile may (still) be strong.
Continue to the full article --> here
The Canadian Press via Global News | Sep 7, 2022
Image: Unsplash/Alice Pasquale
Rising interest rates, high household debt to spur ‘payment shock’ for Canadians
Canadians are increasingly vulnerable to “payment shock” as higher household debt levels collide with oversized interest rate hikes.
- Another major rate hike: The Bank of Canada raised its key lending rate by three-quarters of a percentage point Wednesday, making it more expensive to borrow money in a time of climbing debt.
- Climbing consumer debt: Equifax said total consumer debt climbed 8.2 per cent in the second quarter of 2022 compared with the same quarter last year. TransUnion’s latest credit industry report said total debt grew to an all-time high at $2.24 trillion, up 9.2 per cent from the same time in 2021 and up 16.4 per cent from pre-pandemic levels at the end of 2019.
See: Fintech Lenders Polarized: Some Plan for a Difficult Year as Others See Opportunity
- Relying on cards, loans, and feeling the pressure: It’s a situation experts say could push some to a breaking point as they rely on higher interest rate loans and credit cards to pay for the soaring cost of everyday essentials.
- Wes Cowan, a licensed insolvency trustee and senior vice-president at MNP Ltd., says people are increasingly using credit cards and loans to make ends meet. He says given growing debt levels and escalating interest rates, he expects to see more people struggle to make minimum debt servicing payments in the coming months.
“Anything that has a variable rate attached to it, like the lines of credit, we’re going to see a huge payment shock,” he says. “Everything is more expensive — buying groceries, heating your home, the basics — and now servicing your debt will cost more too.”
Continue to the full article --> here
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
| | |
|---|---|---|
| | |
Fintech Lenders Polarized: Some Plan for a Difficult Year as Others See Opportunity
AltFi | Daniel Lanyon | Aug 22, 2022
Lenders are preparing for a difficult year ahead as pandemic tailwinds cease at the same as high inflation and a host of related economic headwinds start to gather. But some also see opportunity
Sentiment and perspectives
- Lending could soon become much more polarised market with low-risk businesses and low-risk consumers still having plentiful access to credit but higher risk borrowers cut out. The former will therefore be courted more heavily by a larger group of lenders. The latter, the opposite. Lenders meanwhile will require a suite of new data sources to price both groups accurately. Fintech-enabled firms may well be best suited to these conditions.
See: UK Alternative Lenders Funding Delivery Performance to Small Businesses During COVID
- While this scenario makes risks harder to calculate prompting some lenders to pull back, Wilder says fintech lenders may have the advantage to take new market share from incumbents.
- Chris Keane at GDS Link: There's a whole cohort of consumers who are really feeling the pinch through the rising cost of living and businesses that have had their balance sheets flattered through Covid support schemes
- Katrin Herrling, Funding Xchange’s CEO: we're starting to see failure rates for a cohort of SMEs going up after the ‘normal’ signs that you would see to understand risk profiles of businesses become less muted. The next twelve months as a result will become harder for lenders to assess SME borrowers.
- The removal of support from Government-backed Covid loan schemes’ to businesses and the unwinding of consumer savings buffers stockpiled during the pandemic means we are in a new era for lending.
- A key question for lenders is whether to pull back from lending in such uncertain times. Lenders need to know which customers are ‘good’ risks and which customers are now most vulnerable when a complete pullback is not an option.
See: What You Need to Know About Employee Loans in Down Round Times
“At the same time if you are fast, if you have a testing mentality and if you're very analytical, and also embrace the power of additional data... then it's also still a time to win market share and support those consumers in a responsible way with capital and at the same time, do good business,” said Wilder.
Continue to the full article --> here
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
| | |
|---|---|---|
| | |
Clearco Hires Advisor to Evaluate Strategic Options and Exits Foreign Markets
News Achieve (As reported in the Globe and Mail) | Aug 31, 2022
The Toronto-based company, officially CFT Clear Finance Technology Corp., has also hired Financial Technology Partners, a leading US fintech investment bank led by transactions specialist Steve McLaughlin, to explore strategic options, including a possible sale of the company or new funding. Romanov, CEO of Clearco and television star dragon’s lair.
See: Real Estate Fintechs Feel the Heat as Macro Trends Unfold
Michelle Romanov, CEO Clearco:
The company is not for sale, but it is always prudent to consider strategic options in this environment. We were on a very fast international growth trajectory and hired ahead of global forecasts. Then the EU economy changed much faster than we thought. The current macro environment, the slowdown in e-commerce growth, means we are facing some pretty big headwinds that didn’t exist six months ago.
- This year, the fintech industry and broader tech sector globally saw a wave of layoffs in response to deteriorating economic conditions, especially among money-losing start-ups that were heavily dependent on external funding to pursue a “grow at any cost” strategy.
- At the end of July, Clearco laid off 125 of its 500 employees. Ms Romanov admitted at the time that the company was hiring too fast, anticipating growth that never materialized.
- On Tuesday, Clearco said it was partnering with London-based Outfund to take over its international business just months after expanding to Europe. Clearco will reduce its operations to focus on the US and Canada (80% of its business)
See: Canada’s Open Banking Journey: Interview with Simon Redfern, Founder of The Open Bank Project & CEO of TESOBE
- Clearco’s business model is also being questioned by the prospect of more defaults by sellers it finances and rising costs of capital as central banks raise interest rates. The company temporarily stopped offering new cash advances to sellers for a week in July to tighten underwriting practices and raise fees for the second time in two months.
- Also many top executives, including the chief financial officer, chief strategy officer, and vice president of operations and human resources. Ms. Romanov also replaced her former romantic partner and co-founder Andrew D’Souza as CEO this year, although Mr. D’Souza remains executive chairman.
Continue to the full article --> here
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
| | |
|---|---|---|
| | |
Real Estate Fintechs Feel the Heat as Macro Trends Unfold
TechCrunch| Mary Ann Azevedo | Aug 28, 2022
Then 2022 came
In 2020, historically low interest rates led to a surge in both rates and purchases. Existing home buyers rushed to alter the terms of their loans and aspiring home buyers took advantage of those low rates to purchase homes. More people were spending more time at home than ever due to COVID and many needed more space. Many relocated to new homes due to remote work possibilities.
This led to a boom in business for startups catering to home buyers. Companies (like digital mortgage lender Better.com) couldn’t keep up and had to go on a hiring spree to meet all the consumer demand. Venture dollars flowed into proptech after proptech.
See: The Growing Relevance Of Bitcoin In Real Estate
Then 2022 came: Mortgage interest rates, which began their ascent in 2021, continued to climb…significantly. Prospective home buyers, turned off by the rate surge as well as the competitive and overheated housing markets, began to reconsider their plans, as buying was suddenly far less appealing so they turned to rental markets like Rentola.
- At the same time, as the venture market slowed dramatically and suddenly, raising capital was much harder.
- Layoffs in the sector began — and they took place in a range of real estate tech companies, big and small.
- Digital mortgage lender Better.com (first round of four layoffs; you can read that here)
- Real estate tech startup Reali announced last week that it had begun a shutdown
Many fintechs are now focusing on nonprofits
Last week, I came across, or was pitched, several tidbits of news that made me realize that an increasing number of fintech companies are launching products to help nonprofits and charities more efficiently move, raise and distribute more money.
- First up, fintech startups Highnote and GiveCard said they are partnering to help nonprofits, shelters and governments issue prepaid debit cards to the “financially vulnerable” communities they serve. Studies show direct cash payments can put people on a path to permanent housing and end their reliance on predatory lenders.
See: Why BNPL Swedish giant Klarna has sights set on Canada
- Los Angeles–based B Generous, a self-described “fintech for good” platform, has launched Donate Now, Pay Later (DNPL), a new tool it says allows donors “to make contributions to their favorite nonprofits through a proprietary philanthropic credit product called a Point of Donation Loan
- PayPal is expanding further into the charitable donations business with its August 25 launch of support for Grant Payments.
Continue to the full article --> here
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
| | |
|---|---|---|
| | |
The Main Benefits Of Working As A Physician
Aug 29, 2022
Image: Pexels/Negative Space
Making a decision on your future profession is important. You must conduct an extensive study before deciding what to do. However, when it comes to medicine, people choose to become physicians for a variety of reasons, most of which are personal and motivated by their own desires. In any case, in the list below, we will discuss the main benefits of working as a physician!
High salary
Physicians often rank among the top paid professions in most nations. Your doctoral income will vary depending on your years of experience, the nation in which you work, your area of expertise, your degree of schooling, and your credentials. However, before they can get their job positions in hospitals, physicians must complete intensive training. Nevertheless, because of their extensive training, physicians enjoy some of the highest salaries in the profession. In fact, this job is one of the top 30 highest-paying jobs!
Social benefits
On top of that, you will not only make a good livelihood as a physician, but you will also gain the respect and confidence of your patients, and generally people in society. People will always respect your opinions and appreciate your viewpoint since you are a physician in a position of power, especially when it concerns their health. Due to their vital function in society, physicians are held in high regard and are essential to it. For example, physician banks are pleased to provide loans to physicians because they understand the benefits of working with them. They are likely to lend you money for a property because of the commitment you demonstrated in your academic endeavors and the prospect of you earning a high salary in the future!
Remarkable experiences
One of the most amazing experiences a physician can have is saving a patient from certain death. Another time when you gain precious experience is when you gain the appreciation of the patient's family, friends, and others for improving the health of their loved one. Not all jobs can give you these incredible sensations.
Job contentment
When physicians use their medical expertise and training to enhance the lives of their patients, they feel tremendous satisfaction. By becoming a doctor, you will have the chance to specialize in any field of medicine you find most alluring and personally satisfying. For instance, general practitioners are well regarded in their communities and handle a wide range of illnesses. Finding your medical specialty might help you land a career that is a perfect fit for your interests and abilities!
In addition, it is reported that nearly 50% of doctors globally are very happy with their career choice because they can potentially save lives, aid in health improvement, and restore health.
Image: Pexels/Karolina Grabowska
You can be helpful
Doctors play a vital role in society and have the power to significantly improve the lives of those with whom they come into contact. They can enhance people's quality of life and the quality of life of their patients' families. This is frequently a significant duty that may provide physicians with a feeling of purpose and happiness in their profession.
See: How Data Analytics is Used in Healthcare Insurance?
In fact, the main duties of a physician are to protect lives and enhance their patients' general health. They frequently have the chance to assist their patients to recover and increase their well-being by intervening during extremely trying times in their lives. One of the main reasons people pursue a profession in medicine is frequently because of this part of a physician’s job, which can be quite fulfilling.
Job security
When working as a physician, there is a high level of job security. In this industry, there are many career prospects. Compared to other professions, finding work after graduation shouldn't be an issue for physicians because they are in great demand across society. While automation and artificial intelligence are starting to displace jobs in a number of industries, this problem has not yet affected physicians. This job is almost always necessary, particularly in wealthy countries when there are few candidates for this post.
Less physical effort
For example, there are certain specialties in medicine where doctors are not required to perform any physical labor, so this profession requires less physical effort. This benefit may not apply to everyone, especially orthopedists, radiologists, and cardiologists, who may experience back problems later in their careers. Nevertheless, for most people, this is not physically demanding labor. It is because working in construction or becoming a professional athlete is much more strenuous.
By taking care of people's health and teaching them how to always stay healthy, medical professionals may have a beneficial influence on the lives of the people they serve. So, why don’t you become one?
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
| | |
|---|---|---|
| | |
