[ad_1]
Consolidation in Fintech: A Closer Look
Last week saw some significant developments in the fintech industry as consolidation continued to be the theme of 2022. Here are a few of the key happenings.
FIS Acquires Bond
FIS, a provider of financial technology solutions, recently acquired Bond, a banking-as-a-service startup, for an undisclosed amount. This move showcases the resilience of infrastructure in fintech and is a sign of the consolidation that is expected in a no-IPO, less capital rich environment. In recent times, JPMorgan closed its acquisition of Aumni, while Marqeta acquired financial infrastructure startup Power Finance in a $275 million deal. Furthermore, Brazilian fintech infra company Pismo is currently being courted by Mastercard and Visa in a reported $1 billion transaction.
Better.com Lays off Real Estate Team
Better.com laid off its real estate team and shed its real estate business unit. Presumably banking on the real estate boom of 2022, the company’s decision did not account for the market downturn and soaring mortgage interest rates. As the refinancing market shrank and fewer people were interested in buying another house in a tight market, the unit experienced negative effects. Following the layoffs, one employee revealed that they were completely taken by surprise and given no advance notice.
FedNow Set to Launch
The Federal Reserve’s new FedNow Service is set to launch next month and is expected to ease payment rails’ pain altogether. The instant payment infrastructure is designed to be a faster payment rail for financial institutions, offering real-time, 24/7 access to funds. This service will also provide immediate risk management capabilities, which is significant in the face of the fraud and scams that seem to be experienced daily.
Companies like GFT, which are drawing on their experience with Pix in Brazil and the Universal Digital Payments Network, are positioning themselves to integrate with FedNow. GFT has developed architecture and compliance measures so that banks can scale transaction volume and no longer be dependent on closed, third-party services for instant payments. Brazilian instant payments Matera highlighted Pix’s success in Brazil, with 100 million new users over 12 months and 24 billion transactions in 2022, including almost 3 billion in December 2022.
Weekly News
Here are some other headlines that made news in fintech over the past week:
– Affirm and Amazon Pay: Affirm has become the first buy now, pay later provider to be added to Amazon Pay, meaning that any Amazon Pay merchant in the United States can now offer their clients the option to buy now, pay later using Affirm technology.
– Anthemis Group: Anthemis Group has named Harry Harrison as CEO of Anthemis Asset Management, which comes after the firm laid off 16 individuals (28% of its staff) as part of a strategic restructuring to better reflect market conditions.
– Apple Wallet: Among a number of other announcements, Apple has made significant changes to Apple Wallet that enable users to set up recurring payments with Apple Cash and allow businesses to receive identification stored in Apple Wallet.
– UK Neobanks Declare Profitability: Monzo, Starling Bank, and Tandem Bank, three of the United Kingdom’s neobanks, have all declared profitability during the past week, prompting praise from industry pundits.
Conclusion
Consolidation continues to be the focus of the fintech industry in 2022, with numerous acquisitions being seen across the market. The launch of the Federal Reserve’s new FedNow Service next month is expected to make things easier in the payments rail market, while innovations in neobanking and Apple Wallet aims to improve user experience. Although a lot can happen in the coming weeks, it seems that the trend of consolidation will continue well into the future.
FAQs
Q. What is the significance of FIS’s acquisition of Bond?
A. FIS, a provider of financial technology solutions, recently acquired Bond, a banking-as-a-service startup, for an undisclosed amount. This move showcases the resilience of infrastructure in fintech and is a sign of the consolidation that is expected in a no-IPO, less capital rich environment.
Q. What led to Better.com’s layoffs?
A. Better.com’s decision did not account for the market downturn and soaring mortgage interest rates, which led to the layoff of its real estate team and shedding of its real estate business unit.
Q. What is FedNow?
A. FedNow is an instant payment infrastructure designed to provide a faster payment rail for financial institutions, offering real-time, 24/7 availability of funds.
Q. What are some other headlines from the past week in fintech?
A. Some other headlines from the past week include Affirm and Amazon Pay’s partnership, the appointment of Harry Harrison as CEO of Anthemis Asset Management, and updates to Apple Wallet.
[ad_2]
For more information, please refer this link