Hi there
Before jumping into the world of embedded finance, let me share with you a personal story: My wife and I aired on the German version of Shark Tank last Monday. We pitched my wife’s Indian snack startup and got a (handshake) deal on TV. Consequently, I focused last week on supporting her startup, from answering customer queries to making sure orders were processed correctly. Luckily, everything went well, but we did not sign the deal. So I have two quick questions for you: If you like Indian food and live in one of the European countries we deliver to, maybe give it a try and place an order? And if you happen to know angel investors with a focus on food products, please send them my way :)
So after a week focused on healthy Indian snacking, its back to my number one passion, embedded finance. On that note, I made a small but important change to my website: I added a page about my freelancing activities. Previously, I had two separate pages: one for the newsletter and one for my freelancing activities. I thought I should have two websites because it shows that the two are completely separate activities. But I changed my mind. Firstly, it is more transparent to my audience to show what I do for a living. And two websites won’t ensure a clear separation anyway. Secondly, it likely adds more credibility to my newsletter activities when I can show that I have an independent advisor role in the industry. Thirdly and lastly, it makes my life easier to only have to manage one website, which results in more website visitors seeing everything I do. What do you think about the change?
But enough about myself, its time to dive into embedded finance news 👇
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Top Story 🏢
Travel giant Amadeus is preparing to launch a virtual card offering
The Bank of Spain has granted an electronic money institute licence to Outpayce, the payments subsidiary of multinational travel cooperation Amadeus. With this licence, Amadeus is able to offer payment and card products to its business partners and retail customers. In a statement, Amadeus says it will “soon“ be able to offer a prepaid virtual card that can be used across corporate self-booking tools and travel agency booking systems to make payments to providers such as airlines and hotels.
Amadeus announced in late 2022 the plan to found the subsidiary Outpayce with the intention to launch a virtual card programme and, afterwards, to extend the product offering. Outpayce CEO David Doctor, who is a longstanding executive at Amadeus, shared that the company will not only focus on their own offering but develop an “integrated payment ecosystem” for travel companies that can connect to it via APIs.
The travel industry is a hot area for fintech in general. This is likely due to the massive payment volume combined with the high number of players in the industry that have often very complex payment relationships. For that reason, many fintech companies focus on the travel industry. You can basically visit the banking-as-a-service or embedded banking provider of your choice and very likely you will find a page that describes their solution in the travel industry. I would assume that many of them pitched their services to Amadeus as well, but due to the size of Amadeus’ business and their general preference to build such services in-house, they decided to get their own licence.
On a side note, in a previous statement, I found the information that Amadeus was expecting to receive the licence in early 2023. That it took them much longer is not a surprise for many of the fintech-experienced readers. Nevertheless, it serves as a reminder for any company heading into this process that even cooperation with such large resources can take longer than expected. Personally, I tend to ‘joke’ when people ask me about the time it will take them to receive the licence, and my answer is “twice as long as whatever you are expecting.”
EMI approval (2024), Outpayce launch (2022), Blog post from Outpayce CEO David Doctor (2023)
Non-Financial Brands 🏢
Europe
- GetGround launches embedded investment product: The British company offers property investors an all-in-one investment platform, and thanks to a partnership with WealthKernel, it can offer its customers the option to park funds in a money market fund with low-risk and high liquidity. (Link)
- Sumup and Pleo close debt financing rounds: British SumUp has received a massive €1.5b cash injection led by Goldman Sachs, and Danish Pleo received €40m from HSBC. Both companies offer financial services to SMEs and entrepreneurs, combined with adjacent services such as bookkeeping, invoicing, and more. (SumUp, Pleo)
North America
- GoDaddy launches new POS terminals: The domain registrar has made significant steps towards offering payment products to its customers. It adds the GoDaddy Smart Terminal Flex to their offering, a small POS device catered to the needs of restaurants and cafés. (Link)
- FreshBooks is launching a new payment solution: FreshBooks is an early adopter of Stripe Connect's new functionalities, aimed at expediting business onboarding, facilitating transparent payout tracking, and enhancing cash flow management for entrepreneurs. (Link)
- Bill offers international payments: The financial operations platform announced a partnership with Airwallex, which enables same-day or next-day payments in local currencies. (Link)
- Expensify adds unlimited virtual cards: With the new Expensify Visa Commercial Card, businesses can manage all their expenses across employees and merchants, including both one-time and recurring expenses. (Link)
- GM’s credit card programme likely moving to Barclays: Goldman Sachs is reportedly in talks with Barclays over the potential sale of the General Motors credit card programme. (Link)
Infrastructure Provider 🏗️
Europe
- Checkout.com launches Flow: The payment-as-a-service programme aims to simplify customer experiences. Businesses can boost their conversion rates by offering a buyer their preferred payment method based on location, currency, and the type of device users are using. (Link)
- Adyen enables Tide’s expansion to Germany: The British SME neobank had already shared its plan to expand to Germany and is now announcing that Dutch payment giant Adyen will be offering the banking infrastructure. (Link)
- Iwoca lands debt funding from Citibank and Barclays: UK-based SME lender Iwoca receives a total of £270 million and intends to boost its growth in Germany and the UK. The company offers direct lending and embedded lending capabilities. (Link)
North America
- The dispute between BaaS provider Synpase and Evolve Bank & Trust reaches a new level: TabaPay pulls out of the deal to buy assets from bankrupt Synapse, likely due to the ongoing conflict with Evolve Bank & Trust. Synpase fights back and apparently switches off access for its former banking partner, disrupting services for other fintech companies. And yesterday’s bankruptcy court hearing indicates that it might not be over soon. (TabaPay, Cut off startups, Court hearing)
- Wallets-as-a-Service platform raises $14m: Ansa is enabling merchants to offer wallets to their own customers with the aim of increasing loyalty and order volume, as well as reducing payment costs. In simple words, the company wants to enable other merchants to offer Starbucks-type fintech services. (Link)
- FIS unveils embedded finance platform Atelio: The new offering enables companies from all industries to collect deposits, move money, issue cards and more. Atelio is the result of the acquisition of banking-as-a-service provider Bond that FIS acquired one year ago. (Link)
- Marqeta and Uber Eats take partnership to more countries: The global card-issuing platform is extending its US partnership with Uber Eats into eight additional markets: Canada, Australia, Mexico, Brazil, Colombia, Peru, Chile, and Costa Rica. (Link)
Rest of the world
- New card-as-a-service in Kenya: Global issuer-processor Paymentology partners with Diamond Trust Bank to drive financial inclusion in Kenya through the embedding of financial services and the deployment of cards-as-a-service for licenced and unlicensed entities. (Link)
- Nium partners with Emirates NBD: Both companies seek to elevate the remittance experience with seamless, instantaneous cross-border transfers between the UAE and countries worldwide. (Link)
Banks & FIs 🏦
- German bank partners with embedded lending provider: Business customers of the German bank Hypovereinsbank can now apply for and receive a business loan that is powered by Banxware. Its an unusual partnership where a bank integrates an embedded lending provider, but it was expected as the German bank invested in the latest funding round of the embedded lending provider. (Link)
- JPMorgan details its invisible role in embedded finance: The US bank is the partner of choice of corporations like Amazon and Macy’s Marketplace, where it provides banking services to sellers. JPMorgan has kept a low light on these activities so far. (Link)
Insightful links 🤓
- Is ‘Headless Banking’ the next evolution of BaaS? Column in the U.S., Solaris Bank in Europe, or Griffin Bank in the UK all serve as examples of headless banks. Will they be the new norm? (Link)
- Consumers Invest 88% More on Education When Using Embedded Lending: The study looked at different industries and compared consumer interest in direct vs. embedded lending products. (Link)
- Fabrick publishes a report on embedded finance trends in Europe: The research reveals a strong inclination towards investment in payment acceptance solutions over the next 24 months, with a focus on payment orchestration solutions, digital wallets, loyalty systems, digital cards, and multi-country embedded payment solutions. (Link)
- Visa believes embedded lending can create a ‘Halo Effect’ for repeat transactions: According to their survey, only 50% of consumers are satisfied with their current set of available options for financing, and more than 40% of consumers say they would switch to firms and platforms that provide lending options. (Link)
- What will Walmart’s launch of BNPL through One mean for the industry? The entry of retail brands like Walmart into financial services could compel dedicated fintechs to offer more attractive financing options to maintain market share, while also allowing Walmart to deepen its customer relationships, particularly with younger consumers. (Link)
Job Board 👨💻
Head of Payment at a Vertical SaaS: A provider focused on the European property industry is looking for a Head of Payments and Fintech. The company is private equity-owned and employs more than 1,000 people across Europe. Are you interested in this role? Hit reply, and I can tell you more.
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