David Durand, Advisor, Innovation and Advocacy
September 9th, 2020
David Durand, LL.L., B.Sc. chem., – Founder and Managing Partner of Durand Lawyers – Lawyer (Québec)[...]
Global payments: Expansive growth, targeted opportunities
McKinsey&Company | Oct 2018
Robust growth makes payments a dynamic sector for incumbents—and a draw for new competitors.
Global payments revenues swelled to $1.9 trillion in 2017, the best single year of growth in the last five years (Exhibit 1). In last year’s report, we forecast that payments would become a $2 trillion business by 2020. Indeed, 2017’s market performance was so robust—its 11 percent growth rate fueled by continuing strength in the Asia–Pacific corridor—that global revenues are poised to surpass that $2 trillion threshold in 2018, and to approach $3 trillion within five years.
This rapid growth makes payments an expanding and increasingly important component of the broader banking industry. After an extended period in which payments generated roughly 30 percent of overall banking revenues, this metric has turned sharply upward. The continued prominence of payments in banking revenues might come as a surprise, given the continued pressure on payments fees—increasing competition and regulatory pressure—and ongoing low-interest-rate environments in many developed economies. In contrast, the trend makes sense, given healthy underlying fundamentals, including electronic-transaction and digital-commerce growth, and increasing cross-border activity. The growth of the payments component also points to the imperative for financial institutions to develop and continually refresh sound payments strategies to remain competitive in a market being reshaped by technology, new competition, and customer demands.
Not surprisingly, global payments revenue growth is dominated by the Asia–Pacific region, as has been the case for several years. At more than $900 billion, the region now accounts for nearly half of global payments revenue—compared with less than a quarter just six years earlier—as well as four-fifths of recent growth (Exhibit 2).
Remarkably, double-digit growth has continued even as the base of business has grown. The 20 percent growth rate for 2017, driven largely by liquidity factors, was Asia–Pacific’s strongest ever. Although our forecast calls for inevitable moderation, revenues in the region should continue to grow at low double-digit rates over the next five years, still considerably faster than any other region.
See: Large Global Payments Processor Unveils Airdropping Campaign Among Users
Latin America’s payments sector has been the fastest-growing among the major regions in the recent past (albeit off the smallest revenue pool); but growth rates flatlined abruptly in 2017. We expect the region to return to average annual growth of 8 percent over the next five years, second only to Asia–Pacific. While several Latin American countries continued to deliver double-digit growth in 2017, Brazil’s payments sector—the region’s dominant revenue engine—was hampered by regulatory action targeting credit-card rates (Latin America is reliant on interest for two-thirds of its card revenues). Credit-card annual percentage rates (APRs) in Brazil fell by more than 60 percentage points as a result of actions restricting the duration of high-cost revolving credit lines. The plan is expected to reduce delinquency rates but will also reduce average APRs, which remain among the world’s highest. Latin America’s underlying fundamentals remain solid, particularly for domestic payments.
Revenues in Europe, the Middle East, and Africa (EMEA) were similarly near flat, continuing a trend that has persisted for the past decade. The developing nations of Africa and Eastern Europe have generated high single-digit growth, offsetting nominal declines in Western Europe. Fee revenues have been the primary factor in the growth that has occurred, while a persistent environment of low interest rates—reaching negative levels in some cases—acts as a drag on growth. A return to a stable rate environment combined with continued transaction growth will result in revenue growth in the middle single digits for Western Europe until 2022, while Africa and Eastern Europe are likely to continue at their present pace. At the same time, individual companies in the European payments arena, such as Adyen and Wirecard, are finding growth areas that lead to substantial valuations.
On the surface, cross-border payments might appear to comprise a low single-digit share of global payments revenues. However, once liquidity factors such as net interest margins are excluded—as many institutions do in analyzing their own payments P&Ls—this growing category of transactions account for a larger share (roughly one-quarter) despite increasing competition from new entrants and solutions. Cross-border transactions also continue to generate unusually high margins for payments products and serve as a foundation for a broader array of client services.
After a period of tepid results, following the financial crisis, North America’s overall payments revenue growth returned to a healthy 7 percent in 2017, and is poised to continue at a similar pace over a five-year horizon. Credit cards comprise more than half of North American payments revenues, far more than any other geography, and will continue to grow faster than other products. More surprising is that the drag on North American revenue growth, from the temporary slowdown in credit-card usage following the financial crisis, has only recently lifted.
The jump in global revenues in 2017 is a direct reflection of an improved global economic scenario, reinforcing the close link between growth in GDP and payments revenue. According to World Bank data, in 2017, global nominal GDP grew at 6.0 percent year over year, compared with 1.5 percent in 2016. During the same periods, payments revenue increased in similar proportions, from 7 percent in 2016 to 11 percent in 2017.
See: Meet the fintech entrepreneur who thinks payments are boring
Comparing payments revenues across regions, we observe that payments revenue per unit of GDP (a measure of the cost of payments for consumers and businesses) in Asia–Pacific and Latin America is 50 to 60 percent higher than for Europe and North America. In addition, the share of electronic payments transactions in Asia–Pacific and Latin America is 60 to 65 percent lower than in Europe and North America. In other words, payments are significantly costlier for the economy in Asia–Pacific and Latin America, because the cost of processing cash and check payments is higher, as are the fees paid by consumers and businesses.
Transaction dynamics remain strong
Although the strong recent growth in global payments revenue has been broad-based and diverse, an increasing share is related to transactions. This is a positive development for banks and payments providers, as transaction revenues are more predictable and sustainable, and more readily controlled by financial-services firms. Transaction-based revenue now accounts for 40 percent of global payments revenue, up from 37 percent in 2012. We expect this share to grow to 46 percent by 2022, even in an improving rate scenario.
More specifically, while the overall number of transactions continues to increase, the true revenue driver is the electronification of transactions—namely, away from cash—which more than offsets the downward pressure on fees (Exhibit 3). Over the past five years, the share of the world’s transactions carried out in cash has fallen from 89 to 77 percent. At the same time, the share of combined debit- and credit-card use has nearly doubled, from 5 to 9 percent. The decline of cash usage globally is expected to be even more pronounced over the next five years, due to an increasing range of payments options, the push toward real-time payments, the growth of digital commerce, and continued regulatory focus on payments electronification.
Given that the Asia–Pacific region accounts for more than 60 percent of the world’s population, it is not surprising that it is responsible for two-thirds of global transactions. The fact that Asia–Pacific still lags behind other regions in overall electronification at only 21 percent (despite more than doubling since 2012) illustrates the region’s ongoing growth potential. The move away from cash, as witnessed in markets such as China, will serve as the single-largest cause of global electronification. The share of electronification in China has increased more than tenfold over the last five years, from 4 percent in 2012 to 34 percent in 2017.
See: Singapore consortium claims breakthrough in DLT payments project
Meanwhile, North America has become the first region to execute more than half of its transactions electronically. At 450 electronic transactions annually per capita, it far and away leads other regions on this dimension. Meanwhile, individual European countries, such as Sweden and Norway, are executing no more than 20 percent of their transactions in cash, while generating 520 noncash transactions per capita per year.
The shifting digital landscape
The growing popularity of alternative payments solutions, and digital commerce in general, further contributes to the electronification trend. Global digital commerce volume exceeded $3 trillion in 2017 and will more than double by 2022. Asia–Pacific already comprises more than half of this $3 trillion and, due to the fast-growing Chinese market, will increase its share to nearly 70 percent by 2022. Mobile commerce, including in-app payments and mobile browser payments, is the dominant factor driving strong digital commerce growth, due to rising smartphone adoption, an increasing shift toward online shopping, and improvements in network bandwidth. Mobile commerce accounts for 48 percent of digital-commerce sales globally as of 2017, and is forecasted to reach 70 percent by 2022 (tripling to $4.6 trillion).
Consumers and merchants alike are increasingly embracing app-based commerce and in-app payments, with retailers ramping up investments in mobile apps with innovative use cases to provide omnichannel shopping experiences for customers. Globally, mobile apps accounted for more than 30 percent of total digital-commerce volume in 2017, and they are expected to continue strong growth across all regions (Exhibit 4). Digital wallets are estimated to have added approximately 40 billion to global payments revenues in 2017.
The outlook for in-store commerce varies significantly by country and region: in countries with near-field-communication infrastructure, tap-and-pay will drive growth; in the United States, in-store app use will grow as consumer use of order-ahead increases; and in emerging markets, the introduction of new payments solutions will influence how people pay. In the United States, in-person use of digital wallets will increase at a 45 percent compound annual growth rate to reach nearly $400 billion in annual flows by 2022. Although most of this growth is expected to be on “pass through” wallets like Apple Pay, private-label wallets such as Starbucks and Walmart Pay—both of which have enjoyed impressive early adoption—will also continue to increase in popularity. Even with these gains, however, digital wallets will comprise less than 10 percent of US consumer in-person point-of-sale payments in 2022. Lack of ubiquitous merchant acceptance will remain a barrier, along with the continued percentage of consumers who do not know how to use their mobile phone to pay at the point of sale.
See: The lending revolution: How digital credit is changing banks from the inside
In the United Kingdom, a total of 38 million contactless transactions were conducted using a mobile device in 2016 (representing roughly $358 million in spending). While this is significant in absolute value, it accounts for only 1.2 percent of in-store payments, indicating a huge opportunity for growth. China leads on this front with 40 percent of in-person spending already on mobile digital wallets. However, unlike the United States, almost all of this is on closed-loop systems like Alipay and WeChat Pay. China’s ratio is projected to continue to increase to nearly 60 percent by 2022. Within the same region, Japan remains a largely untapped market. Research has found that close to 70 percent of Japanese consumers across all age groups still prefer to use cash when making in-store purchases, mainly due to security concerns with mobile payments. It is interesting to note, however, that despite the preference for cash, prepaid-card solutions like Suica have found high adoption in Japan. In the third section of this report, we look in more depth at the digital landscape.
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
 |  |  |
CONGRATULATIONS TO THE 2020 FINTECH DRAFT PITCHING AND DEMO COMPANY WINNERS!   |
AltFi | Daniel Lanyon | Nov 20, 2020 A boom in business banking has helped boost Starling Bank’s coffers. Strong momentum in new customer accounts and increasing revenues have prompted digital bank Starling to break even, according to a trading update for the three months to 31 October. Starling Bank, which was launched by Anne Boden five years ago, is the first ‘neo-bank’ to reach this milestone, the company said. In October Starling hit 1.42 million retail accounts compared to 827k, an increase of 71.7 per cent. Over the same period business accounts were the standout growth area with an increase of 245 per cent, from 74,000 to 256,000. Business accounts saw a 500 per cent increase in total deposits with the average amount held by SMEs also going up. Starling now has total customer deposits of c.£4bn. This has all helped Starling generate a positive operating profit of £0.8m for the month of October 2020, which represents £10.1m on an annualised basis. See: Neobanks Can’t Fight the COVID-19 “Flight to Quality” Investment Crowdfunding Advocates Join to Launch New Fintech Startup GUARDD in Move to Boost Secondary Markets for Exempt Securities In total Starling generated total operating income of £9m for the month of October 2020. This, it adds, translates to an annualised revenue ...
Read More
Crowdfund Insider | JD Alois | Nov 24, 2020 The exempt securities marketplace can be arcane and challenging to manage for entrepreneurs seeking to raise capital. The advent of online capital formation has helped to democratize access to capital as well as streamline securities offerings but hurdles do remain. A new startup co-founded by several prominent names in the investment crowdfunding industry seeks to facilitate secondary transactions for private securities. Sherwood “Woodie” Neiss, co-founder of Crowdfund Capital Advisors, Doug Ellenoff, Managing Partner of Manhattan law firm of Ellenoff, Grossman, and Schole, and Jim Dowd, founder and CEO of North Capital Private Securities, have joined to launch GUARDD: A Fintech designed to support secondary market trading for private company securities, including digital assets/tokens to facilitate compliance with both federal transparency requirements and state blue sky laws. According to a note from the company, GUARDD enables the necessary disclosure and dissemination of private company information for investors, regulators, and market participants. This allows issuers to comply with federal and state financial disclosure requirements related to the trading of private company securities in secondary markets, thus addressing a challenge regarding exempt securities that tend to be illiquid. Overall, more liquidity can help price discovery ...
Read More
Paul | Weiss | Nov 18, 2020 China’s competition regulator, the State Administration for Market Regulation (“SAMR”), issued a consultation draft of the Anti-Monopoly Guidelines on the Sector of Platform Economies (the “Draft Guidelines”) on November 10, 2020. This marks China’s first major step in formulating a comprehensive regime to regulate competition among platform businesses operated on the Internet (the “Platform Economy”) and signals SAMR’s changed regulatory priorities with a focus on anti-competitive behavior in the Platform Economy. The Draft Guidelines attempt to address perceived shortcomings in applying traditional antitrust analysis to the Platform Economy. SAMR has drawn upon the experience of regulators and academics in this emerging area and attempted to consolidate the lessons learnt in various jurisdictions. The Draft Guidelines set out in detail the considerations that may be taken into account and the defenses that may be available, providing some guidance to platform businesses on how to achieve compliance. See: China Stops Jack Ma’s $35 Billion Ant IPO From Going Ahead DOJ files antitrust lawesuit challenging Visa’s $5.3 billion acquisition of Plaid While the Draft Guidelines are brief in length, only 23 provisions in total, they are wide‑ranging in their scope. Rather than an exhaustive review of ...
Read More
The New York Times | Steven Lee Myers and Keith Bradsher | Nov 24, 2020 China’s leader, Xi Jinping, is pursuing a strategy to make the country’s economy more self-sufficient, while making other places more dependent on it than ever. After Australia dared last spring to call for an investigation into the origins of the coronavirus, China began quietly blocking one import after another from Australia — coal, wine, barley and cotton — in violation of free-trade norms. Then this month, with no clear explanation, China left $3 million worth of Australian rock lobsters dying in Shanghai customs. Australia nonetheless joined 14 Asian nations and just signed a new regional free-trade deal brokered by China. The agreement covers nearly a third of the world’s population and output, reinforcing China’s position as the dominant economic and diplomatic power in Asia. See: What to expect from Biden-Harris on tech policy, platform regulation, and China It’s globalization with Communist characteristics: The Chinese government promotes the country’s openness to the world, even as it adopts increasingly aggressive and at times punitive policies that force countries to play by its rules. With the United States and others wary of its growing dominance in areas like ...
Read More
Gowling WLG | Tara Amiri-Khaledi | Nov 24, 2020 As an entrepreneur trying to get your business off the ground, there are many factors to think about and the legal "stuff" may easily be forgotten. In this article, we touch on the top 5 considerations entrepreneurs need to think about when starting out. Term Sheets Once you have structured your business, you will have your idea tested (hopefully) and you will need capital. One typical way is to look for parties that will invest in start-ups such as angel or venture capital investors ("VC"). At this point, you will hear the term "Term Sheet" a lot. See: Debt vs. Equity Financing: Pros And Cons For Entrepreneurs 7 Types of Investors to Avoid Like The Plague When Trying To Raise Capital For Your Startup Convertible Debt vs. Equity: Which Is Right for Your Startup? At its simplest form a term sheet is a summary big picture document of key terms agreed upon between the entrepreneur and the VC in contemplation of a financing and will cover, at a minimum, "economics issues" (valuation of the company, i.e. how much money for what percentage of the company) and "control issues" (who will run ...
Read More
Bloomberg | Katie Roof and Scott Deveau | Nov 24, 2020 Private financial technology business Stripe Inc. is in talks to raise a new funding round valuing it higher than its last private valuation of $36 billion, according to people familiar with the matter. The valuation being discussed could be more than $70 billion or significantly higher, at as much as $100 billion, said one of the people, who asked not be identified because the matter is private. That would make it currently the most valuable venture-backed startup in the U.S., according to CB Insights. Stripe’s software, which competes with Square Inc. and Paypal Holdings Inc., is used by businesses to accept payments. According to its website, Stripe’s customers include Amazon.com Inc., Salesforce.com Inc., Lyft Inc. and Instacart Inc. See: Lightspeed and Stripe Partner to Launch New Payments Feature Stripe, the world’s most valuable private fintech company, is getting into lending The company has benefited during the pandemic with more shoppers turning to e-commerce. It’s gone on offense during the downturn this year, starting a card-issuing service for U.S. clients and agreeing to acquire a Nigerian startup to expand in Africa. Brother Founders Irish brothers John and Patrick Collison founded Stripe ...
Read More
Mayer Brown | Paul Forrester | Nov 18, 2020 In its recent report “Holistic Review of the March Market Turmoil” (Report), the Financial Stability Board (FSB) notes that “[t]he March [2020] turmoil has reinforced the need to better understand interconnections and amplification channels in the financial system and to consider the nature of vulnerabilities in non-bank financial intermediation (NBFI) in relation to the liquidity stress and the implications of central bank liquidity support, and draw lessons about overall resilience of the NBFI sector.”1 The Report also notes the need “for further work to increase the resilience of NBFI.”2 The Report also notes that “non-bank financial entities – comprising investment funds, insurance companies, pension funds and other financial intermediaries – have different structures and are subject to distinct regulatory frameworks within and across jurisdictions. Their asset share has increased to almost half of global financial assets, compared to 42% in 2008, due to both inflows and valuation increases. One factor behind this increase has been the growth of investment funds, whose assets have expanded from roughly US$21 trillion in 2008 to US$53 trillion in 2018.”3 See: OSFI launches consultation on technology risks in the financial sector (Deadline: Dec 15) The Report ...
Read More
GSMA | Nov 25, 2020 GROWING AND GLOBALISING 2019 marked a major milestone for the mobile money industry: the number of registered mobile money accounts surpassed one billion. Reaching the one billion mark is a tremendous achievement for an industry that is just over a decade old. The mobile money industry of today has a host of seasoned providers with a broad set of operational capabilities, a full suite of products and a global reach. With 290 live services in 95 countries and 372 million active accounts, mobile money is entering the mainstream and becoming the path to financial inclusion in most low-income countries. See: Task Force Analyzes Role of Fintech in Accelerating SDGs Mobile money services are available in 96 per cent of countries where less than a third of the population have an account at a formal financial institution. INCREASING USER TRUST AND RELEVANCE Overall growth in transaction values has been impressive in the past 12 months. Total transaction values grew by 20 per cent, reaching $690 billion in 2019, which means the industry is now processing close to $2 billion a day (over $1.9 billion). This growth and scale is a positive signal for the industry as ...
Read More
Silicon Public | Lisa Ardill | Nov 24, 2020 Learn how to kickstart your career in fintech and what to expect of the field from people working in it, from software developers to blockchain engineers. Wondering what it takes to carve out a career in fintech? It’s an industry going from strength to strength with plenty of choice. You can opt to work for a specialised firm, such as Revolut or Stripe, or in-house at wider companies like Accenture or Aon. And there are plenty of jobs up for grabs in the sector. Recent announcements across the island of Ireland include Transact’s 110 jobs for Limerick, Overstock’s plans for a new tech team in Sligo and Lightyear’s expansion in Belfast. If you’re hoping to take your own career down a fintech route, read on to learn from others in the industry. Who can pursue a career in fintech? As with any field today, it takes a village to make fintech work – and a diverse one, at that. Danny Buckley of EY, for example, started out in law before switching paths. See: AI Will Transform 500 Million White-Collar Jobs In 5 Years; Silicon Valley Must Help He’s now the company’s ...
Read More
Financial News | Will Hadfield and Emily Nicolle | Nov 20, 2020 There is now 'a greater urgency by institutional investors to not miss out — to invest some of their assets in bitcoin, because this time looks different' It may be hedge funds, rather than retail investors, that are driving this autumn’s rally in the price of bitcoin. And this time round, the institutional investors are buying exchange-traded products as well as the underlying cryptocurrency. A bitcoin ETP managed by Swiss issuer 21Shares is receiving creations — the equivalent of inflows — of as much as $3 million a day. In November last year, it took all month to attract the same amount of new money. See: Canada’s first public Bitcoin fund hits $100M mark Investors in bitcoin ETPs are overwhelmingly institutions, rather than individuals. “This is purely us targeting institutional investors,” Laurent Kssis, managing director at 21Shares, told Financial News. “Our business is focused solely on institutional investors’ mandate to add crypto to their portfolio strategies and we have not really touched the retail market yet.” Many institutional investors sat on the sidelines when bitcoin experienced its first dramatic rally in 2017 — the cryptocurrency surged to $19,783 before collapsing ...
Read More
AltFi | Daniel Lanyon | Nov 20, 2020 A boom in business banking has helped boost Starling Bank’s coffers. Strong momentum in new customer accounts and increasing revenues have prompted digital bank Starling to break even, according to a trading update for the three months to 31 October. Starling Bank, which was launched by Anne Boden five years ago, is the first ‘neo-bank’ to reach this milestone, the company said. In October Starling hit 1.42 million retail accounts compared to 827k, an increase of 71.7 per cent. Over the same period business accounts were the standout growth area with an increase of 245 per cent, from 74,000 to 256,000. Business accounts saw a 500 per cent increase in total deposits with the average amount held by SMEs also going up. Starling now has total customer deposits of c.£4bn. This has all helped Starling generate a positive operating profit of £0.8m for the month of October 2020, which represents £10.1m on an annualised basis. See: Neobanks Can’t Fight the COVID-19 “Flight to Quality” Investment Crowdfunding Advocates Join to Launch New Fintech Startup GUARDD in Move to Boost Secondary Markets for Exempt Securities In total Starling generated total operating income of £9m for the month of October 2020. This, it adds, translates to an annualised revenue ...
Read More
Read More
Crowdfund Insider | JD Alois | Nov 24, 2020 The exempt securities marketplace can be arcane and challenging to manage for entrepreneurs seeking to raise capital. The advent of online capital formation has helped to democratize access to capital as well as streamline securities offerings but hurdles do remain. A new startup co-founded by several prominent names in the investment crowdfunding industry seeks to facilitate secondary transactions for private securities. Sherwood “Woodie” Neiss, co-founder of Crowdfund Capital Advisors, Doug Ellenoff, Managing Partner of Manhattan law firm of Ellenoff, Grossman, and Schole, and Jim Dowd, founder and CEO of North Capital Private Securities, have joined to launch GUARDD: A Fintech designed to support secondary market trading for private company securities, including digital assets/tokens to facilitate compliance with both federal transparency requirements and state blue sky laws. According to a note from the company, GUARDD enables the necessary disclosure and dissemination of private company information for investors, regulators, and market participants. This allows issuers to comply with federal and state financial disclosure requirements related to the trading of private company securities in secondary markets, thus addressing a challenge regarding exempt securities that tend to be illiquid. Overall, more liquidity can help price discovery ...
Read More
Read More
Paul | Weiss | Nov 18, 2020 China’s competition regulator, the State Administration for Market Regulation (“SAMR”), issued a consultation draft of the Anti-Monopoly Guidelines on the Sector of Platform Economies (the “Draft Guidelines”) on November 10, 2020. This marks China’s first major step in formulating a comprehensive regime to regulate competition among platform businesses operated on the Internet (the “Platform Economy”) and signals SAMR’s changed regulatory priorities with a focus on anti-competitive behavior in the Platform Economy. The Draft Guidelines attempt to address perceived shortcomings in applying traditional antitrust analysis to the Platform Economy. SAMR has drawn upon the experience of regulators and academics in this emerging area and attempted to consolidate the lessons learnt in various jurisdictions. The Draft Guidelines set out in detail the considerations that may be taken into account and the defenses that may be available, providing some guidance to platform businesses on how to achieve compliance. See: China Stops Jack Ma’s $35 Billion Ant IPO From Going Ahead DOJ files antitrust lawesuit challenging Visa’s $5.3 billion acquisition of Plaid While the Draft Guidelines are brief in length, only 23 provisions in total, they are wide‑ranging in their scope. Rather than an exhaustive review of ...
Read More
Read More
The New York Times | Steven Lee Myers and Keith Bradsher | Nov 24, 2020 China’s leader, Xi Jinping, is pursuing a strategy to make the country’s economy more self-sufficient, while making other places more dependent on it than ever. After Australia dared last spring to call for an investigation into the origins of the coronavirus, China began quietly blocking one import after another from Australia — coal, wine, barley and cotton — in violation of free-trade norms. Then this month, with no clear explanation, China left $3 million worth of Australian rock lobsters dying in Shanghai customs. Australia nonetheless joined 14 Asian nations and just signed a new regional free-trade deal brokered by China. The agreement covers nearly a third of the world’s population and output, reinforcing China’s position as the dominant economic and diplomatic power in Asia. See: What to expect from Biden-Harris on tech policy, platform regulation, and China It’s globalization with Communist characteristics: The Chinese government promotes the country’s openness to the world, even as it adopts increasingly aggressive and at times punitive policies that force countries to play by its rules. With the United States and others wary of its growing dominance in areas like ...
Read More
Read More
Gowling WLG | Tara Amiri-Khaledi | Nov 24, 2020 As an entrepreneur trying to get your business off the ground, there are many factors to think about and the legal "stuff" may easily be forgotten. In this article, we touch on the top 5 considerations entrepreneurs need to think about when starting out. Term Sheets Once you have structured your business, you will have your idea tested (hopefully) and you will need capital. One typical way is to look for parties that will invest in start-ups such as angel or venture capital investors ("VC"). At this point, you will hear the term "Term Sheet" a lot. See: Debt vs. Equity Financing: Pros And Cons For Entrepreneurs 7 Types of Investors to Avoid Like The Plague When Trying To Raise Capital For Your Startup Convertible Debt vs. Equity: Which Is Right for Your Startup? At its simplest form a term sheet is a summary big picture document of key terms agreed upon between the entrepreneur and the VC in contemplation of a financing and will cover, at a minimum, "economics issues" (valuation of the company, i.e. how much money for what percentage of the company) and "control issues" (who will run ...
Read More
Read More
Bloomberg | Katie Roof and Scott Deveau | Nov 24, 2020 Private financial technology business Stripe Inc. is in talks to raise a new funding round valuing it higher than its last private valuation of $36 billion, according to people familiar with the matter. The valuation being discussed could be more than $70 billion or significantly higher, at as much as $100 billion, said one of the people, who asked not be identified because the matter is private. That would make it currently the most valuable venture-backed startup in the U.S., according to CB Insights. Stripe’s software, which competes with Square Inc. and Paypal Holdings Inc., is used by businesses to accept payments. According to its website, Stripe’s customers include Amazon.com Inc., Salesforce.com Inc., Lyft Inc. and Instacart Inc. See: Lightspeed and Stripe Partner to Launch New Payments Feature Stripe, the world’s most valuable private fintech company, is getting into lending The company has benefited during the pandemic with more shoppers turning to e-commerce. It’s gone on offense during the downturn this year, starting a card-issuing service for U.S. clients and agreeing to acquire a Nigerian startup to expand in Africa. Brother Founders Irish brothers John and Patrick Collison founded Stripe ...
Read More
Read More
Mayer Brown | Paul Forrester | Nov 18, 2020 In its recent report “Holistic Review of the March Market Turmoil” (Report), the Financial Stability Board (FSB) notes that “[t]he March [2020] turmoil has reinforced the need to better understand interconnections and amplification channels in the financial system and to consider the nature of vulnerabilities in non-bank financial intermediation (NBFI) in relation to the liquidity stress and the implications of central bank liquidity support, and draw lessons about overall resilience of the NBFI sector.”1 The Report also notes the need “for further work to increase the resilience of NBFI.”2 The Report also notes that “non-bank financial entities – comprising investment funds, insurance companies, pension funds and other financial intermediaries – have different structures and are subject to distinct regulatory frameworks within and across jurisdictions. Their asset share has increased to almost half of global financial assets, compared to 42% in 2008, due to both inflows and valuation increases. One factor behind this increase has been the growth of investment funds, whose assets have expanded from roughly US$21 trillion in 2008 to US$53 trillion in 2018.”3 See: OSFI launches consultation on technology risks in the financial sector (Deadline: Dec 15) The Report ...
Read More
Read More
GSMA | Nov 25, 2020 GROWING AND GLOBALISING 2019 marked a major milestone for the mobile money industry: the number of registered mobile money accounts surpassed one billion. Reaching the one billion mark is a tremendous achievement for an industry that is just over a decade old. The mobile money industry of today has a host of seasoned providers with a broad set of operational capabilities, a full suite of products and a global reach. With 290 live services in 95 countries and 372 million active accounts, mobile money is entering the mainstream and becoming the path to financial inclusion in most low-income countries. See: Task Force Analyzes Role of Fintech in Accelerating SDGs Mobile money services are available in 96 per cent of countries where less than a third of the population have an account at a formal financial institution. INCREASING USER TRUST AND RELEVANCE Overall growth in transaction values has been impressive in the past 12 months. Total transaction values grew by 20 per cent, reaching $690 billion in 2019, which means the industry is now processing close to $2 billion a day (over $1.9 billion). This growth and scale is a positive signal for the industry as ...
Read More
Read More
Silicon Public | Lisa Ardill | Nov 24, 2020 Learn how to kickstart your career in fintech and what to expect of the field from people working in it, from software developers to blockchain engineers. Wondering what it takes to carve out a career in fintech? It’s an industry going from strength to strength with plenty of choice. You can opt to work for a specialised firm, such as Revolut or Stripe, or in-house at wider companies like Accenture or Aon. And there are plenty of jobs up for grabs in the sector. Recent announcements across the island of Ireland include Transact’s 110 jobs for Limerick, Overstock’s plans for a new tech team in Sligo and Lightyear’s expansion in Belfast. If you’re hoping to take your own career down a fintech route, read on to learn from others in the industry. Who can pursue a career in fintech? As with any field today, it takes a village to make fintech work – and a diverse one, at that. Danny Buckley of EY, for example, started out in law before switching paths. See: AI Will Transform 500 Million White-Collar Jobs In 5 Years; Silicon Valley Must Help He’s now the company’s ...
Read More
Read More
Financial News | Will Hadfield and Emily Nicolle | Nov 20, 2020 There is now 'a greater urgency by institutional investors to not miss out — to invest some of their assets in bitcoin, because this time looks different' It may be hedge funds, rather than retail investors, that are driving this autumn’s rally in the price of bitcoin. And this time round, the institutional investors are buying exchange-traded products as well as the underlying cryptocurrency. A bitcoin ETP managed by Swiss issuer 21Shares is receiving creations — the equivalent of inflows — of as much as $3 million a day. In November last year, it took all month to attract the same amount of new money. See: Canada’s first public Bitcoin fund hits $100M mark Investors in bitcoin ETPs are overwhelmingly institutions, rather than individuals. “This is purely us targeting institutional investors,” Laurent Kssis, managing director at 21Shares, told Financial News. “Our business is focused solely on institutional investors’ mandate to add crypto to their portfolio strategies and we have not really touched the retail market yet.” Many institutional investors sat on the sidelines when bitcoin experienced its first dramatic rally in 2017 — the cryptocurrency surged to $19,783 before collapsing ...
Read More
Read More
Related Posts
New correspondent banking data – the decline continues at a slower pace*
Accelerating winds of change in global payments
Kickstarter dumps Amazon Payments in favor of Stripe
IMF: World Economic Outlook April 2020 – The Great Lockdown
BNY Mellon Report: Global Payments 2020: Transformation and Convergence
Report: Access to Capital for Canadian Growth-Orientated Medium-Size Firms
