Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Payments, Transfers, Rewards
Redefining Payday: Earned Wage Access (EWA) Insights from Harvard Study
Survey Insights | Aug 9, 2023
A recent Harvard University study delved into the impact of the burgeoning early wage access (EWA) industry on low-income earners and consumers.
What is Earned-Wage-Access?
- Earned Wage Access (EWA) refers to a financial service that allows employees to access their earned wages before their scheduled payday. Instead of waiting for the traditional bi-weekly or monthly pay cycle, workers can withdraw a portion of their earned income as needed, often through a mobile app.
- EWA aims to help employees manage unexpected expenses and avoid costly overdraft fees or high-interest payday loans.
- Some EWA services charge a small fee per transaction, while others offer the service for free.
See: As the Gig Economy Silently Takes Over Industries, Some Experts are Calling for Regulation
- Industry Growth: Previous research indicated a growing trend in the use of EWA apps. In 2020, workers accessed $9.5 billion, a significant increase from $6.3 billion in 2019 and $3.2 billion in 2018. The growth of the EWA industry has led to discussions about its benefits, potential drawbacks, and the need for regulatory oversight.
Key Findings
- Survey Responders:
- Over 1,000 individuals who utilized EWA programs were surveyed.
- The majority (80%) were gig workers or hourly-wage employees
- 93% had credit scores below 670.
- Usage Channel:
- 41% of the participants accessed EWA programs via their employers
- 40% using these services weekly. Additionally
- 60% had used a direct-to-consumer EWA app.
See: Optimizing Your Approach to Human Resources for the Digital Age
- Fees:
- 26% estimated they spent over $300 on various loan-related fees in the past year.
- Interestingly, while 40% said their EWA app was free, 42% mentioned a small fee per use. The fees, though seemingly minimal, can accumulate, with 28% spending an average of $3 per EWA request.
- Pros and cons of EWA apps:
- Positives included budgeting advice, low fees, and reduced financial stress.
- However, concerns were raised about high service fees, potential overdraft charges, and the cycle of continuous borrowing.
EWA Garners Attention from CFPB and some States
- The Consumer Financial Protection Bureau (CFPB) is urged to establish clear standards across the EWA industry, given its rapid growth and the vulnerability of its users. The EWA market has been under regulatory scrutiny, especially regarding its classification under credit regulations.
- The study suggests that the CFPB could use its authority to demand more transparency from EWA companies, which would guide regulatory policies. The introduction of data usage and privacy standards was also recommended.
- State-level actions are heating up: States like Nevada and Missouri have enacted laws governing EWA companies. These laws often require EWA providers to undergo audits, background checks, and maintain payment records.
See: Canada’s First-Ever Tech Talent Strategy: Unpacking Canada’s Groundbreaking Immigration Announcement
Where to from Here?
In the ever-evolving landscape of financial services, Earned Wage Access stands out as a need and innovative solution, bridging the gap between hard work and immediate financial needs. It's a movement challenging traditional pay cycles and empowering the workforce. But as with all revolutions, questions arise, and the path forward beckons further exploration. Will EWA redefine the future of pay, or will it evolve into something even more groundbreaking?
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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Klarna’s Meteoric Rise in the Canadian Financial Ecosystem
News | Aug 9, 2023
Image: Klarna
Klarna, the AI-powered global payments network and shopping destination, has made significant strides in the Canadian market since its inception. With its recent announcement, the company has solidified its position as a major player in the Canadian financial landscape.
From Launch to Leader
Klarna opened its doors to the Canadian market in February 2022. In the short span of less than 18 months, the company has achieved remarkable milestones that many businesses only dream of reaching in such a timeframe.
See: Future of Neobanking: Exploring the Landscape of AI-Powered Digital Banks
Recent Milestones:
- Growth: Klarna now boasts a staggering 640,000 active consumers, a testament to its growing popularity and trust among Canadians. The company has efficiently processed over 2 million orders, indicating a robust and reliable system catering to a vast number of transactions.
- Innovative Features: Klarna has not rested on its laurels. It introduced the "Pay Now" option, allowing Canadians an immediate and full payment facility. The Klarna Express Button further simplifies the checkout process, ensuring a seamless shopping experience.
- Strategic Partnerships: Klarna has successfully forged alliances with esteemed brands such as Ssense and Airbnb. On the distribution front, collaborations with giants like Stripe, WooCommerce, and Adyen have been established.
Retailer Empowerment
One of Klarna's standout initiatives has been its affiliate marketing publisher program in Canada. This program allows brands to tap into Klarna's extensive consumer network. Notable brands like Coach Outlet, Booking.com, Sephora, Pandora, and lululemon have already integrated this program, showcasing Klarna's growing influence.
Anticipated Moves for Further Growth
While Klarna's current achievements are commendable, the company is expected to make several strategic moves to ensure sustained growth:
See: McKinsey: Tech Trends 2023 That Every Fintech, Bank, or Financial Service Provider Must Consider
- Klarna may look to introduce more tailored financial products and services catering to the unique needs of Canadian consumers.
- Building on its current partnerships, Klarna might explore collaborations with more local brands and businesses to further penetrate the Canadian market.
- With the rise of digital banking and e-commerce, Klarna could invest in enhancing its technological infrastructure, ensuring faster, more secure transactions.
In Conclusion
Klarna's journey in Canada, though relatively short, has been filled with significant achievements. Its commitment to innovation, coupled with strategic partnerships, has set it on a path of continued success. As the company looks to the future, the Canadian market eagerly anticipates its next big move.
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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PayPal Officially Launches U.S. Dollar Stablecoin for Web3 Ecosystem
News | Aug 8, 2023
Image: Unsplash/Muhammad Asyfaul
PayPal has officially launched its U.S. Dollar Stablecoin, named PayPal USD (PYUSD).
- This digital currency is fully backed by U.S. dollar deposits, short-term U.S. treasuries, and other similar cash equivalents. Users can redeem the stablecoin on a 1:1 ratio for U.S. dollars.
- The primary purpose of PayPal USD is to cater to digital payments and Web3. It has been designed to be compatible with widely used exchanges, wallets, and Web3 applications. The stablecoin is available from today and will be progressively rolled out in the U.S. (excluding Hawaii) in the upcoming weeks. More details can be found on PayPal's official page for PYUSD.
- PayPal USD aims to minimize friction for inexperienced payments in virtual settings. It will enable fast transfers to support friends and family, facilitate remittances, international payments, and direct flows to developers and creators.
See: OpEd: Draft U.S. Bill on Stablecoins Highlight Differences with CBDCs
- The stablecoin will also support the continued growth into digital assets by some of the world's most prominent brands. A significant portion of the current stablecoin volume is utilized in web3-specific environments. PayPal USD is designed to be compatible with this ecosystem from its inception and will soon be available on Venmo.
Bridging TradFi and Emerging Web3 Ecosystem
- This move by PayPal signifies a bridge between traditional fiat currencies and the emerging Web3 for consumers, merchants, and developers. The introduction of a stablecoin by such a major financial institution underscores the growing acceptance of digital currencies and their potential to reshape the financial landscape.
Dan Schulman, the president and CEO of PayPal:
The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar.
- Dan Schulman further emphasized PayPal's commitment to responsible innovation, compliance, and its history of introducing new experiences to its customers. Schulman believes that these factors form a solid foundation for the growth of digital payments through the newly introduced PayPal USD.
Market Approves
- Following the announcement, PayPal's shares saw an increase of over 2%. Stablecoins, such as the one introduced by PayPal, are frequently used for trading in and out of other crypto assets like bitcoin and ether. Their advantage lies in the fact that they don't enter the traditional financial system, allowing traders to move in and out of positions more swiftly and cost-effectively than with fiat currencies like the dollar.
Bank of Canada: Central Bank Digital Currencies Literature Review and New Questions
- This move by PayPal is indicative of the growing acceptance and integration of digital currencies in mainstream financial institutions. The introduction of a stablecoin by such a prominent player in the financial sector could pave the way for further innovations and broader adoption of digital currencies in the future.
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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Navigating the Virtual Prepaid Card Landscape: Opportunities and Challenges
Aug 2, 2023
Virtual prepaid cards are reshaping the financial landscape, offering new avenues for FinTech innovation, and providing secure, efficient solutions for businesses and unbanked populations.
Money today is different than it was five years ago. It's more nimble, secure, online, and democratized. The transformation of the financial landscape has been fueled by the expansion of eCommerce, contactless payments, and the rise of digital wallets. This evolution has positioned prepaid virtual cards at the forefront of the payment industry, particularly in the Asia-Pacific (APAC) region.
How Do Virtual Prepaid Cards Work?
Prepaid virtual cards are digital payment solutions that can be deployed in a widespread manner or surgically, making them an attractive option across various use cases and segments. They hinge on three aspects:
See: Canadian Prepaid Payments Industry Increases Financial Services Innovation and Choice
- Speed to Issuance and Use: Virtual prepaid cards can be issued and used quickly, providing immediate access to funds.
- Frictionless Interoperability: They offer seamless integration with various payment platforms and systems.
- End-to-End Security: Virtual prepaid cards ensure secure transactions, adhering to stringent regulatory requirements, including KYC (Know Your Customer) and AML (Anti-Money Laundering) controls.
Primary Users of Virtual Prepaid Cards
- Small to Medium-Sized Businesses (SMBs): For SMBs, prepaid virtual cards can streamline supplier payments, simplify fund flows, and provide better liquidity management. They offer enhanced control for travel expense management and international payments, ensuring efficient tracking and reducing the need for traditional banking processes.
See: From Gaming to Gig Economy: How Canadians are Embracing New Payment Methods
- Corporate Sector: The corporate sector sees prepaid virtual cards as a way to manage budgets, employee spend, travel budget, and more. They are viewed as a solution for specialized, narrow verticals, addressing specific niche markets.
- Unbanked Populations: Prepaid virtual cards also present opportunities to address unbanked (and underbanked) populations, providing seamless, secure, and efficient payment experiences.
Opportunity for FinTechs
Despite the potential, prepaid virtual cards come with challenges, including fraud, security, and cyber threat risks. FinTech startups may face difficulties in meeting the level of governance controls needed to scale a prepaid solution. The cost of acquiring these issuances is also rising due to the competitive nature of the space.
However, partnerships with established providers can help FinTechs work within payment schemes by providing security around settlement and supporting multi-currency operations. Such collaborations can unlock the benefits of virtual cards in a secure yet agile way, enabling FinTech eMoney issuers to leverage innovative prepaid processing platforms.
See: BoE Speech: 4 Areas at the Intersection of Payment Innovation, Tokenization, and Money
- The B2B space is ripe for the utility and convenience that prepaid virtual cards bring, particularly in commercial payments. They create a closed-loop environment for the supplier network, simplifying back-end infrastructure.
- Standardization across markets and providing interoperability is essential. It ensures a consistent experience across secure rails in various markets.
- Understanding and complying with regulatory requirements, including KYC and AML controls, is vital for the successful implementation of prepaid virtual cards.
Conclusion
The virtual prepaid card trend is not just a fleeting phenomenon; it's a global trend driven by digitalization. It offers a promising avenue for FinTechs, businesses, and unbanked populations. By tapping into this opportunity, FinTechs can play a pivotal role in shaping the future of payments, making them more accessible, secure, and efficient. Collaborations, innovation, and adherence to regulatory standards will be key to unlocking the full potential of this burgeoning industry.
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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The Hard Part of Building a Fintech Startup: A Conversation with Cato Pastoll, CEO and Co-Founder of Loop
Podcast | Jul 31, 2023
Image: Bank on loop
"The Hard Part" podcast with host, Evan McCann sits down with Cato Pastoll, the CEO and Co-Founder of Loop, for this discussion.
Loop is a company that offers tailor-made products including CAD/USD corporate cards, interest-free spending, corporate-level purchasing power, no-fee global payments, accessible growth capital, and real US dollar accounts to help businesses grow.
They delve into the journey of Loop, starting from its pivot from Lending Loop to what it is today. They explore why word of mouth has become one of their fastest growth channels and why caring about your customer is the ultimate flywheel for any business, and also discuss the changes needed in our banking regulations to foster a more conducive environment for businesses.
See: Process Flow Comparison: How VISA Works When Swiping a Credit Card at a Merchant’s Shop VS Digital Wallet
So, whether you're an entrepreneur, a business enthusiast, or someone interested in the dynamics of the financial industry, this episode is packed with insights that you wouldn't want to miss. Tune in and let's dive into the hard part of building and growing a business with Cato Pastoll.
Loop's new website: bankonloop.com
Connect with Cato Pastoll: Linkedin
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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Ant Group’s Restructuring and Rebooting of Its Hong Kong IPO
Ant Group | Jul 30, 2023
Image: Unsplash/Guillaume de Germain
Ant Group, the fintech giant backed by Jack Ma, is undergoing significant restructuring, which could potentially pave the way for a Hong Kong initial public offering (IPO). However, recent reports suggest that the IPO may not be imminent.
Here are some key takeaways from the current situation:
Restructuring Plans: Ant Group is planning a restructuring that will separate some operations that aren't core parts of its China financial-related business. This includes its blockchain, database management services, and international business. These will be left out of a main entity that will be used to apply for a financial holding license in China. This restructuring could provide some relief to shareholders affected by the regulatory crackdown on the company.
Potential Hong Kong IPO: Once the restructuring is completed and Ant secures a license for its financial holding company, it can prepare for an IPO in Hong Kong. This is a shift from the previously pursued dual Shanghai-Hong Kong listing that was halted by the Chinese government in 2020. However, the plans are yet to be finalized and may be subject to change.
See: Consultation Paper for Comment: Hong Kong SFC Sets the Stage for Retail Access to Crypto Platforms
Share Buyback: The company has received approval from shareholders to buy back as much as 7.6% of shares at a valuation of about $79 billion. This is significantly lower than its market capitalization ahead of the scrapped IPO in 2020, and down from the $150 billion value when global funds bought into it five years ago. This buyback could potentially provide some return to the investors.
IPO Not Imminent: Despite the restructuring plans, Ant Group is unlikely to proceed with a market listing in the near future. The company will need to assess internal and overall market conditions and ensure that any attempted listing is legal and in keeping with regulations. This suggests that while the restructuring may pave the way for an IPO, it may not happen in the short term.
In conclusion, while Ant Group's restructuring plans could potentially pave the way for a Hong Kong IPO, the timeline remains uncertain. Investors and stakeholders should closely monitor the situation for further developments.
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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The Transformative Impact of Instant Payments on Financial Crime Mitigation
Payments | Jul 30 2023
Image: Unsplash/Blake Wisz
The advent of instant payments is revolutionizing the financial landscape, acting as a catalyst for speed and innovation in financial crime mitigation.
This article explores the insights shared by Adam Gable, Product Director of Financial Crime, Treasury, and Risk at Temenos, and Hani Hagras, Chief Science Officer at Temenos, during the Temenos Community Forum in Vienna.
Instant payments demand real-time processing
- This necessitates swift and precise security checks to prevent financial crime. Any inefficiency in this process can lead to interruptions in customer experience, loss of customer goodwill, and potential damage to brand reputation. For instance, a security check that ends up in a queue for manual review or inaccurate checks that lead to customer fraud can have serious repercussions.
- Impact for banks:
- Banks must ensure robust security protocols are in place.
- Gable emphasizes that as checks are conducted, some will invariably require investigation. This time-consuming process can negatively impact customer experience.
- There is a cost factor for banks transitioning to instant payments. They need to proactively consider the systems and processes required for this shift and others payment trends driving the future.
See: Future of Neobanking: Exploring the Landscape of AI-Powered Digital Banks
- Artificial Intelligence (AI) plays a pivotal role in mitigating crime in instant transactions.
- Hagras explains that AI can leverage automation to provide a seamless user experience, coupled with a solid audit trail, making it easier for banks to scale up.
- AI can combat financial crime through sanctions screening and anti-money laundering processes. It can automatically detect fraud while allowing false positives to be processed without interrupting the customer experience.
- AI is responsible for generating models that comply with various regulatory requirements, enabling banks and financial institutions to use AI with trust.
- The key is to use explainable AI, where generated models are easily understood, analyzed, and audited by business users and authorities.
The battle against fraud is ongoing
- Opaque [AI] box models, which do not sufficiently explain the decision-making processes, are not accepted by many regulators.
- Hagras concludes that explainable AI processes are a key focus for Temenos, and meeting current and future AI 'explainability' regulations will be essential.
See: FedNow Real-Time Payment Service Launches: A Game Changer in the U.S. Financial System
Conclusion
In conclusion, the introduction of instant payments is accelerating innovation in financial crime mitigation. With the right systems, processes, and the use of AI, banks can effectively combat financial crime, ensuring a secure and seamless customer experience.
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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