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Hi dear reader,

New week new things to tackle, from Australia Neo-Bank Up launching BPNL with a little twist, to Robinhood being fined in NY, to Redwood Bank reporting its first full-year profit 🎉 And much more! Keep reading...

Last week we launched our latest report on Starling Bank, we shared a blog post to get you started on the company and we also have been uploading different documents to our member's area. If you did not have the opportunity last week today is the day to do it!

Australian Neo-bank UP launches BPNL alternative Maybuy 

Up bank, an Australian Neo-bank has recently launched savings service Maybuy.

It is designed as an alternative to BNPL products which have become increasingly popular in recent years. Maybuy will create an automated savings plan for users looking to purchase items online. Upon reaching their goal, customers can decide whether to buy the item or save the money for another purpose.

A survey conducted by Up Bank indicates that 30% of Australian adults under 35 feel stressed when using BNPL, and 29% feel apprehensive. The study inspired Up Bank to create the savings-based solution to ease the minds of those suffering from buyer’s remorse.

To promote the solution, Up Bank is launching a pop-up store in Melbourne to encourage users to avoid impulse buys with an “Anti-Impulse Machine”, which will allow users to trade in purchases and save money instead. The event aims to support Aussies in making wiser financial decisions when it comes to online shopping.

Source: Up bank

Yapily joins the Variable Recurring Payment trend

Open banking platform Yapily has launched its variable recurring payments (VRP) product and signed one-click payments platform Volume as its first customer. Volume will be using Yapily's product to provide its merchant customers with an alternative to standing orders and direct debit payments over time. 

VRP allows businesses and consumers to use open banking for recurring payments of varying amounts, without the need to re-authenticate every transaction. VRP has triggered the next wave of disruption at the checkout, and is the direct debit equivalent of open banking whereby the movement of money is quicker, cheaper, and the customer has more control. 

Yapily is also targeting the UK's largest banks - mandated by the Competition and Markets Authority to introduce VRP - through its year-long partnership with Ozone API.

Source: Yapily

Robinhood fined $30 million by New York Department of Financial Services

Robinhood’s crypto unit (RHC) has been slapped with a $30 million fine by New York State Department of Financial Services for "significant" anti-money laundering, cybersecurity and consumer protection violations. Despite self-reporting compliance with the rules, an NYDFS investigation uncovered a litany of failures at the brokerage as it struggled to keep pace with customer demand for crypto services.

The regulator found that the RHC’s BSA/AML program:

  1. is inadequately staffed

  2. fails to fully address RHC’s operational risks

  3. includes policies that were in violation of State Department rules

  4. was not given adequate compliance resources as it grew

  5. failed to comply with certain consumer protection requirements as the Robinhood website did not maintain a distinct, dedicated phone number for the receipt of consumer complaints.

Under the settlement, in addition to payment of a $30 million penalty, RHC will be required to retain an independent consultant that will perform an ongoing evaluation of regulatory compliance and remediation efforts by the firm. Following the assessment, Robinhood announced that it will be laying off 23% of staff due to the cryptocurrency market crashes. Read more here.

Global Payments to acquire Evo 

Global Payment is to acquire smaller rival EVO payments for nearly US$ 4 billion in an all-cash deal that will extend its reach in the B2B sector. Headquartered in Atlanta, EVO currently offers merchant acquiring and payments processing services to more than 550,000 merchants in over 50 markets and 150 currencies.

The acquisition of EVO is highly complementary to the company’s technology-enabled strategy and will provide meaningful opportunities.The two companies will be able to deliver an unparalleled suite of distinctive software and payment solutions to their combined 4.5 million merchant locations and more than 1,500 financial institutions worldwide.

The deal coincides with the offloading of Global Payments' Netspend consumer payments business to Rev Worldwide for $1 billion. The transaction, which is expected to close no later than the first quarter of 2023, is expected to deliver $125 million of run-rate synergies.

To read more about this year’s FinTech Mergers and Acquisition, head to our feed.

Evo payments

Redwood Bank posted its first full-year profit

Specialist lender Redwood Bank, the British Challenger Bank for SMEs, has hit full-year profitability less than five years after launching. Redwood opened in August 2017 after being ‘born in the cloud’ and achieving one of the fastest licence-to-launches in UK banking history, with a focus on offering secured SME mortgages for business owners.

The specialist lender, which started with a team of 12 and now employs more than 125 employees, has posted a pre-tax operating profit of £2.2 million in the year to December 31, 2021, compared to a £1.7 million loss in 2020. Over the period, the bank saw its loan book increase by 14% to £370m and notched a 15% rise in deposits to £438m.

The results point to a resilient business model at a challenging time for most Neo-banks, with shareholders investing a further £9.9m of Tier 1 capital in Redwood Bank during the year, increasing the total invested to £47.9m.

Source : Redwood Bank (Shown above: The 1 Year Business Saving Bond)

Goldman Sachs’ credit card unit under investigation

Goldman Sachs's credit card division is undergoing an investigation by the Consumer Financial Protection Bureau (CFPB). According to a securities filing on Thursday, the Wall Street giant was a subject of examination by the CFPB for possible charges of fraud relating to the company's management issues in processing refunds, errors with consumer accounts, reporting back to bureau, and advertising.

A Goldman Sachs spokesperson stated they are cooperating with the federal agency in this investigation, however the details of the probe are still to be revealed. The firm has been the target of numerous customer complaints since 2019, with clients claiming unresolved problems with fees and refunds with their Goldman credit card accounts.

Goldman Sachs is reportedly absorbing over $1.2 billion in losses to back its move into the digital consumer market.

The C-Innovation Team

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Take a look at our latest report on Starling Bank 
Starling Bank: Money-making In Digital Banking

Let us know what your research needs are, we will be pleased to help! Get in touch!

Javier Guevara Torres

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