Hi dear reader,
This week starts strong and promising, not only did our latest deep-dive report came out last week, The Rise and Fall of Digital Disruption, but a lot has happened too.
We not only have the new deep-dive out now but another one is in the works and coming shortly focused on Starling Bank and taking into account all the new information they have recently released about reaching their first annual profit! 🎉
Qonto wanting to acquire Penta, Starling bank decided against continuing its expansion by withdrawing its Irish application for a license. Apple and Apple Pay raising questions and doubts about their transparency and more! Keep reading...
Qonto seeking to acquire German Fintech Penta
Qonto, the online payment solution targeted at freelancers and SMEs, sets its sights on acquisition of Penta. The deal is expected to close within the next few weeks.
Qonto aims to combine its wider reach and core banking system with Penta’s knowledge of the German market. Both companies have ambitions to create higher-value products for their users and expand their markets.
Penta is an emerging Neo-bank for freelancers, sole proprietors, and SMEs, and Qonto views its acquisition as the next logical step in strengthening the direction of its digital banking solutions in Europe. Both firms were founded in 2017, tracking impressive growth since inception. In 2021, Qonto achieved 170% YoY customer growth.
Founded in 2016, Qonto’s goal was to simplify everyday banking for SMEs and freelancers across Europe. Already present in four European markets, acquiring Penta will lead the company to be the finance solution of choice for one million European SMEs and freelancers by 2025, as told by the CEO of Qonto Alexandre Prot.
In April 2022, Qonto raised €5 million in a crowdfunding campaign with the original goal of just €1 million, in a bid to gain shareholders and develop their product. In May, the company partnered with cryptobank Coinhouse to provide SMEs and freelancers the opportunity to invest in digital assets. Read more here.
Stay tuned for our upcoming deep-dive report on Qonto.
Source : Penta
Starling Bank withdrew its Irish Banking License Application
Uk digital bank Starling has decided not to pursue an Irish banking licence as it changes its plans for international expansion. Despite pursuing the licence for more than four years, the digital bank withdrew its application on Monday.
While the process had been interrupted in 2020 by the Covid-19 pandemic, it was reported to be at the final stage and close to completion when the plug was pulled. Ireland was supposed to serve as a base for Starling's European expansion plans and the bank had already assembled a small team to work on the ground in Ireland ahead of the launch.
Boden claims that Starling will shift its focus to white labelling its banking-as-a-service software platform to other banks.
The move also comes at a time when FinTechs have seen their valuations under pressure. Data from CB Insights showed that in the last six months, publicly listed FinTechs have seen close to a half a trillion dollars wiped from their all-time highest valuations.
Privately-owned Starling Bank actually saw its valuation double between 2021 and 2022. After a £130.5m internal fundraising round was completed in April 2022, the bank was valued at £2.5 billion in 2022. Read more here.
Apple faces US antitrust suit over Apple Pay
Apple is facing an antitrust-class action lawsuit in the US accusing it of illegally profiting from card issuers through policies that prevent competition to its Apple Pay wallet.
A complaint filed in San Francisco federal court accuses Apple of denying rivals access to the NFC chip technology in iPhones needed to develop a competing mobile wallet. This means that only Apple Pay can make contactless payments at the point of sale, meaning the company "coerces" customers. Having secured a monopoly, Apple charges card issuers who use Apple Pay supracompetitive fees for a service that is available on Android devices for free, according to the lawsuit.
The policy sees Apple extracting up to $1 billion annually from more than four thousand banks and credit unions in fees in violation of federal antitrust law, according to attorneys at Hagens Berman and Sperling & Slater on behalf of the plaintiff, Iowa’s Affinity Credit Union.
Apple Pay is the only mobile payment service that may access the NFC 'tap and go' technology embedded on iOS mobile devices for payments in stores, a process that has been damned by banks in a number of jurisdictions for preventing competition from their own proprietary apps.
This news comes not long after Apple paid a total of $55 million in fines to the Dutch regulator for failure to comply with local competition laws, preventing dating app providers in the Netherlands from accepting non-Apple payment methods.
Learn more about Apple payments in our blog post.
BNP Paribas enters Crypto Custody Space
French banking Giant BNP Paribas Securities Services (BNPPSS) has become the latest asset servicer to promote its push into the digital assets custody sector. The French firm has forged an agreement with two FinTechs – Fireblocks and Metaco – to help develop its digital capability.
Fireblocks will provide a digital wallet as well as ‘tokenisation’ and connectivity infrastructure.
BNPPSS will also integrate Metaco’s digital asset custody platform with its own asset servicing infrastructure.
The company is following the example of other custodians and asset servicing firms looking to develop their digital asset and crypto capabilities. At the end of June, French firm Caceis announced a partnership with Swiss firm Taurus to develop a digital custody offering. Citi and Societe Generale have also partnered with Metaco for their own respective digital asset custody services in recent weeks.Other firms like State Street and Commerzbank have also launched digital or crypto custody businesses in recent months.
The development of a robust custody market is seen as essential to increasing institutional involvement in the digital assets space. It is also seen as a priority for regulators looking to make the crypto sector less susceptible to the loss of assets.
Coinbase granted crypto service provider in Italy
Crypto firm Coinbase has been approved by Italy's financial regulator to operate as a crypto assets service provider. The Organismo Agenti e Mediatori introduced new requirements for all companies offering crypto trading, custody or other services, in light of the rapid growth of the market. The regulatory approval will enable Coinbase to continue offering crypto services in Italy and to bring new products to market in the country.
Coinbase currently operates in close to 40 European countries via its offices in Ireland, the UK and Germany and is planning to obtain licences in more jurisdictions. However, despite the expansion plans, the company has experienced some difficulties in the past year, much like other crypto service providers.
Coinbase shares have plummeted by 81% this year while a fifth of the staff have been laid off. It has also seen its trading volumes fall leading it to fall out of the top ten of crypto exchanges by volume.
Read more about cryptocurrency in our latest blog.
Source : Elliptic
The C-Innovation Team