4-part series on Digital Identity. Part 4 = The investor says this is a big opportunity.

Digital identity is a big market, worth USD 13.7 billion in 2019, forecast to grow at a CAGR of 17.3% to USD 30.5 billion by 2024 (according to Markets and Markets™). To quote Markets and Markets: The increased focus on enhanced customer experience is anticipated to be a major driver, and the trend is expected […]

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4-part series on Digital Identity. Part 3 = JoQPublic says this is about the trade-off between privacy & convenience.

Do you do passwords properly (long & complex & frequently changed)? Or do you think life is too short, so you entrust your identity to some service that becomes your gateway to the Internet? Do you find it a bit disturbing that these services know your most intimate secrets, but you are too busy to […]

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4-part series on Digital Identity. Part 2 = The bank says this is about CYA, KYC, KYT and CAC/LTV.

Starting with the rude stuff, CYA = Cover Your Ass. Clean part of headline: KYC = Know Your Customer, KYT = Know Your Transaction, CAC = Customer Acquisition Cost, LTV = Life Time Value. Read on, all will be revealed. For banks this is CYA because they need enough legal cover to minimise fines when […]

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4-part series on Digital Identity. Part 1 = regulators say “stop those bad guys”

Are you really sure I am not a dog? Maybe I am a really smart dog with an AI implant pretending to be a human. Disclosure, Daily Fintech is written by a stealth mode AI venture as a proof of concept. Seriously folks, you cannot know my Identity. To read this post you don’t care. […]

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Australia’s Adatree At the Forefront of Australia’s Open Banking Push

Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia If Australian businesses were still on the fence about how Open Banking will transform the competitive landscape, then following the release of Australian Open Banking fintech Adatree’s landmark […]

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Australia’s Zip Co Cements Global Payments Presence With Acquisition Of QuadPay

Many quality listed fintech’s have represented once in a decade buying opportunities after the bottom fell out of the global market in mid-March.

In Australia, Zip Co falls well and truly into that category, having rallied off lows of around $1.17 in March to close at $6.35 at the close of ASX trade on Wednesday.

The buy now pay later fintech is steaming ahead on other fronts too, having this week announced the acquisition of US buy now pay later fintech QuadPay, for $403 million.

The deal will be funded by scrip, with Zip issuing approximately 119 Zip shares, priced on the 15 day volume weighted average price of $3.39.

Alongside the acquisition, the fintech is also raising fresh capital to support its expansion into the US market, raising $200 million from US based growth investor, Heights Capital Management.

Like its local competitor AfterPay, the acquisition pushes Zip further onto the global stage, and positions the business as a global heavyweight in the booming buy now pay later space. While the company already had operations in several offshore locations, the US adds an additional $6T in terms of addressable market for the business.

As a result of the transaction, Zip will have combined annualised total transaction volume of $3B, with QuadPay effectively contributing one third of that volume, via its established base of 3500 merchants and 1.5 million customers.

Interestingly, and what will no doubt have been a key determinant in the deal, especially for a fintech, both QuadPay and Zip leverage the same code base, a NZ based platform it acquired back in 2019, via its acquisition of PartPay.

Zip is proof Australian fintechs can successfully compete at the highest level on the world stage, especially when it comes to payments infrastructure and rails. Australia has a significant legacy of producing strong payments infrastructure businesses, and no doubt many more will be borne out of the inroads and talent being bought up inside aspirational organisations like Zip.

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Australia’s Largest Bank Leaves Fintech Startups For Dead With Benefits Finder App

 

Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia

In the second quarter of this year, the UN estimates the COVID-19 pandemic will wipe out 6.7% of all working hours, globally. That’s the equivalent of 195 million jobs.

We’re already seeing surges in unemployment rates in many countries – the US unemployment rate rose to 14.7% in April, just shy of predictions of 16%. No matter where we live, images of individuals queuing up outside welfare offices (if they exist) has become a common sight on our evening news bulletins.

Even if you’re still working now, chances are you’re worried you might not be soon. Everything has become very unpredictable, so tracking every dollar that you spend is even more important than it was yesterday, or the day before.

Which means there is a significant opportunity for startups that hone in on solving that exact problem – helping people track what they spend, reduce what they spend, find out what they are owed and save for the unknown. Right now, we all have a heightened awareness that saving money and reducing our outgoings is more important than ever.

For me, this is the moment fintech companies can really prove their mettle. Show me how I can make more money or save more money, compared to what I am doing right now. It’s that simple. If a business can execute on that, then they have my dollar – because they are promising they can deliver more of them. That is a service I’m willing to sign up for.

Ironically in Australia, a service like that isn’t being delivered by a fintech, it’s been delivered by a bank – CommBank, the biggest bank in Australia.

It’s Benefits Finder service, which was released in late 2019, helps its customers find their share of the $10 billion in unclaimed government rebates and benefits owed to them. During April, the number of claims started by customers doubled.

The app was built in conjunction with the Harvard Sustainability Transparency Accountability and Research (STAR) Lab, and aims to return $150 million to customers’ over the year.

Of course, like any great service, you have to sign up to CommBank to access it. Something tells me they are going to see a significant spike in applications this year…

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Travel Credit Cards Are Dead. Will Fintech Invent What Comes Next?

Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia

For years the lure of certain credit cards has been their tie ups with frequent flyer programs. While most of us don’t like credit, for some the risk/reward trade-off for the odd free return trip and/or upgrade to business class is worth it.

But what happens when literally overnight, your credit card’s frequent flyer points become temporarily worthless? As an Amex Velocity card holder, I was one of thousands of credit card holders in Australia that found themselves in that very situation after Virgin Australia went into voluntary administration. While their loyalty arm is separate to their core business, and isn’t in administration, redemptions have been frozen.

So I put in a call to Amex to find out what they would do for me. Largely speaking, it was nothing. No transfer of points to an alternative program, or refund of annual fee. Nada.

Many credit cards, like Amex have hitched their wagon to the travel industry. And while it’s almost a certainty that travel will resume at some point, will we really have an appetite to do it, like we did before?

Cashed up boomers who are most at risk of catching the virus won’t be too keen to jump on the next flight to coronavirus hotspots New York or London. Millennials staring down the barrel of unemployment will list travel last on their spending wish list (rent and food will be coming first for a while). Families struggling to pay mortgages and meet rising food costs won’t have fat in the budget for that annual Bali trip. All of this against a backdrop of mercurial border restrictions throws serious cold water on the travel industry.

And by extension, the credit card industry.

So where to next? Well, if credit cards are to survive, they need to find another reason to exist, and not put all their eggs in the travel basket. There is lots of opportunity here for fintechs that package up consumer rewards in other domains, to find a ready ear at the strategy workshops of the schemes.

When I went hunting for a new credit (yes, it’s time to kiss goodbye to the Amex), my first thought went to where the vast majority of my spend goes now – groceries. Next I thought of internet, my mobile plan spend, and then my electricity and gas.

Luxuries like travel aren’t that interesting in the new economy we’re entering into. What matters most is being able to pay the bills. The necessities. If someone can give me a credit card that allows me to do that for less, then maybe I’ll get sucked into the credit vortex again…

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Should Google To Pay Us To Use Their Rumoured Debit Card?

Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia

If the rumours that Google will be releasing a debit card in the near future are true, which, let’s be honest, it feels incredibly likely, then this would significantly change the fintech game, and in more ways than Apple’s previous announcement.

Many of us have allowed the slow but sure creep of Google into our lives, so it seems logical we’d eventually accept Google as a financial brand. However while there are lots of reasons why Google would want us to use their debit card (better predictive analysis for ad targeting, new revenue streams etc etc), there will need to be a strong reason for consumers to buy in.

It’s one thing letting Google Home into your living room, let along letting the search giant know what you spend on. Mind you, Google’s predictive engines are getting so powerful, the ability for them to probably figure out what we spend on now, without even looking at our bank accounts, is probably pretty good.

So what could Google offer us, to entice us away from our Revolut’s, Monzo’s and other snazzy fintech apps?

Well, quite simply, they could make it absolutely free, or pay us to use them.

The world is entering into a very strange time. Millions of workers are unemployed, and industries, which have died overnight, will face a significant uphill battle restarting (travel, anyone?). Never before have we cared so much about tightening our purse strings, and getting savvier with our money.

How we spend and the data that goes along with that is valuable. Of course, no tech giants want to pay us for it, but perhaps consumer sentiment towards this is changing?

This week, in Australia, the treasurer, Josh Frydenberg has spearheaded a push to force global media businesses, like Google and Facebook to share advertising revenue with Australian media companies, who it says drive significant traffic to the advertisers while realising none of the benefits. It is an absolute watershed moment for the industry, and many are watching very closely. The tech giants had, as one can imagine, argued against this strongly. In the end, they were forced.

These publishers know the value of what they are creating, and how tech giants are monetising it. And now they will have a slice of the pie.

Faced with a shiny new financial toy from Google, will we be as savvy?

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Coronavirus To Kill Cash For Good

Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia

If there is one financial instrument particularly exposed to the coronavirus, then it would have to be cash payments. For several weeks now, as virus fears ramp up in Australia, I have noticed local businesses banning cash payments overnight, to protect staff from potential infection risks associated with contaminated cash.

Banning cash isn’t fearmongering on the part of retailers – the risk of infection is real. For those still clinging on to their polypropylene bank notes, maybe don’t (or at least wear gloves). The novel coronavirus, COVID-19, has been found to linger around on this surface for up to three days.

Copper coins on the other hand, aren’t so bad. Thanks to the long understood anti-microbial properties of copper, you’ll only need to wait 4 hours before your pocket change is safe to touch again.

While cash has been on the decline for many years, it has refused to die out completely, despite the best marketing efforts of the payments industry. While nearly every sector around the world is hurting right now from a drop off in demand, causing a softening in payments volumes, could acquirers be buffered somewhat by the overnight shift of cash to card? Quite possibly. This buffer could well be sustained, spiking card payments in a short space of time.

This is because even when the pandemic relents, the public’s mood will continue to be one of heightened awareness around cleanliness, making a shift back to cash unlikely. It also means acquirers, which might be hurting somewhat now from the drop off in discretionary spending, have a potentially cashless future to look forward to.

Europe might be one of the first regions to see this spike.

According to The 2018 World Cash Report by G4S, cash represents 78.8% of all transactions in volume and 53.8% in value in Europe. In Italy, one of the hardest hit regions when it comes to the COVID-19 pandemic, a European Central Bank Payment Usage Survey estimated cash transactions made up 86% of all transactions.

There will be financial winners and losers in the post COVID-19 world. My money is on cash not being king much longer.

New readers can see 3 free articles before getting the Daily Fintech paywall. After that you will need to become a member for just US$143 a year (= $0.39 per day) and get all our fresh content and our archives and participate in our forum.

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