Hi friends

Happy New Year! I hope you were able to enjoy some peaceful days with your family and feel recharged for 2024. I spent Christmas and New Years in South Africa and did not think too much about embedded finance. Except for that one time when the person ahead of me in the queue at the cashier paid their bill with a debit card from Swiss retailer Coop. You cannot escape embedded finance ;-)

In this newsletter, I cover:

• 🏨 Data Plus launches an embedded payment solution for hotels
• 🐣 ClearBank enters embedded finance
• 🌏 Non-financial provider news from Japan (Sony) to Mexico (Rappi)
• 📚 2023 summaries and white-papers about embedded finance in the insightful read category
• 👨‍💻 Five (!!) new jobs on the embedded finance job board

Sounds exciting? Then let’s go :)

Thank you and the other 835 subscribers for your support. Do you want to help me grow the newsletter and receive rewards? Read below!

A special thanks to Stefan Wittmann who has referred five new subscribers to this newsletter. As a reward, I am sharing the link of his choice which is the New Years Resolution Quiz from his employer, the embedded lending provider Banxware.

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Embedded Payment solution for hotels and hospitality businesses

Data Plus is a US-based accounting provider focusing on the needs of hotels and other hospitality businesses. A typical customer of Data Plus is a small hotel chain that relies on various different data sources. With the help of Data Plus, the hotel chain can aggregate these sources and leverage the reporting tools of Data Plus to access the data in the most convenient way. The typical customer saves time and money and can easily comply with local regulations.

This week, Data Plus announced that it has expanded its existing partnership with Edenred Pay to create a new embedded payments solution for hotels and hospitality businesses. Previously, the small hotel chain using Data Plus had to use up to three or four different platforms to complete payment tasks or manage the whole accounts payable side. With the integration, the small hotel chain does not have to leave Data Plus for any payment-related activities.

While this obviously saves time for Data Plus customer’s and improves reporting, I found the three following changes due to the partnership interesting:

• Data Plus customers will be incentivised through an interchange kick-back model to use credit cards more often
• Some of the hotels are still using checks to make payments. But with the new integration, it is expected that many of them will switch to virtual one-time use cards
• Hotels will have it easier to identify invoice discrepancies and vendor errors, which will save money

Many of us (including myself) have no experience in the hotel industry, but we can easily understand that similar integrations can also benefit other industries. While such a story will not be on the front page of embedded finance news, it shows to me that it’s not just the big tech companies that get embedded finance.

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Other Non-Financial Brand News

🇬🇧 HSBC joins ranks of suitors for Tesco's banking arm. The retailer launched its bank in 1997 and is likely realising that it does not need to own a bank to offer banking products. The brand Tesco Bank is expected to stay.

🇩🇪 The social card, a pre-funded debit card from authorities for refugees, is gaining momentum in Germany, with more authorities signing an agreement with the provider, Publk.

🇺🇸 Bookkeeping provider Freshbooks launches payroll services in cooperation with payroll provider Gusto.

🇺🇸 X has announced its intention to launch peer-to-peer (P2P) payments this year. The goal is to create more user utility and new opportunities for commerce.

🇺🇸 Tesla partners with Origence for electric vehicle financing.

🇯🇵 Blackstone set to acquire majority stake in Japan’s Sony Payment Services.

🇲🇽 Rappi has announced that its virtual savings account offering, RappiCuenta, will cease operating in Mexico. The company said it wants to focus on its card product called RappiCard.

Not embedded finance, but still relevant:

🇩🇪 Trading provider Trade Republic launches a card product and announces that a full-fledged bank account will follow. Even though this is fintech news, I found it a good example of a company that wants to leverage payments to increase daily relevance. The 1% card cashback (higher than consumer interchange!) is likely financed by additional investments by the same user.

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ClearBank enters embedded finance*

The British infrastructure provider ClearBank has made a few new leadership hire announcements in the last few weeks. But for us embedded finance folks, the announcement of Paul Staples as the new group head of embedded banking is obviously the most important one. Paul has not only been in embedded finance for a very long time, including building the embedded finance product at HSBC, but he is obviously also a reader of this newsletter 👋

For the few of you that don’t know (much about) ClearBank, the bank was founded in 2015 and was the first fully cloud-based clearing bank in the UK. ClearBank has been ranked among the fastest-growing tech companies in the UK and is the infrastructure partner of hundreds of banks and fintech companies, such as Tide, Allica Bank, Raisin, and Paynetics. These companies are regulated, usually having an e-money licence, and they use ClearBank for access to the local payment rails (=clearing) and accounts (i.e., safeguarding accounts for e-money institutes).

With the hire of Paul, ClearBank has now decided to go after another type of customer: non-financial brands and, thus, unregulated companies. While this may sound like a small change, it definitely is not. Yes, both types of companies will use the same underlying product (i.e., access the same payment rails and use the same type of accounts), but because those companies are unregulated, they will need a lot more. While ClearBank can rely on the fact that a regulated customer is either aware of certain compliance aspects or can even outsource some of the work to them, that is not always the case with unregulated companies. This means that unregulated companies will need to consume different APIs and have different processes. And it doesn’t stop with product and compliance. Since most of the unregulated businesses have never done anything in fintech before, they will likely need more support with understanding, launching, and promoting a fintech product.

Due to ClearBank’s track record, we all expect that their embedded finance product will have a similar impact, but only time will tell. The UK fintech infrastructure market is seeing some interesting changes  (i.e., challenges of Railsr and launches from NatWest Boxed and Griffin), and now with ClearBank extending its focus, we will make sure to watch.

*If you search online for ClearBank and embedded finance, you will find a lot of content describing ClearBank as an embedded finance provider. However, it seems that the company has not worked with non-financial brands before and only focused on regulated entities, so technically, they have not been in embedded finance before. Correct me if I’m wrong 🤓

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Other Infrastructure News

🇬🇧 Adyen builds direct connections to the Bank of England and Faster Payments Services in record time.

🇬🇧 Andaria adopts Mastercard for embedded finance product offering.

🇬🇧 WealthKernel, a provider of digital investment services and infrastructure, has provided its customers with US equities trading.

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Insightful reads

📬 Whitesight shares a review of banking-as-a-service activities 2023 and highlights the most important non-financial brands entering embedded finance in the last year. And Jason Mikula shared his 2023 US-BaaS roundup.

🎙️ Griffin CEO David Jarvis speaks about the achievements and challenges in the past months.

📝 Embedded insurance whitepaper: New growth opportunities for brands and insurers in Europe.

👨‍💼 The managing director of the embedded insurance subsidiary of German insurance HDI, Marat Nevretdinov, shares first insights about the development of the new venture.

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Job Board

1️. Head of Payments at an automobile-focused payment provider.

2. Business Development Manager at an automobile-focused payment provider

3️. VP Marketing at an embedded banking provider.

4️. CFO at an embedded lending provider.

5️. Strategy Consultant with a focus on Fintech and Green Finance.

All of them are Europe-based.

Does one of these roles sound interesting to you? Hit reply, and I will tell you more!

Are you hiring? Submit your vacancy and get featured in the next edition.

Are you looking for a new opportunity? Submit your profile and we will send you suitable opportunities (we won’t share your name with anybody).

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