Supply Chain Finance Patents granted to Prime Revenue; best or worst of times in small business finance?

I am covering today for Jessica Ellerm. It is the best of times and the worst of times in Small Business Finance. Best of times: Small Business Finance is a window of opportunity big enough to drive a truck through. This remains as true today as it was when we first articulated it about about 4 years ago and […]

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New Business Banking Startup Zeller Set For Australian Launch

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 Business banking hasn’t had a lot of competition in Australia. That is set to change, with news a former Square, Visa and NAB executive is set to launch […]

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Banking-As-A-Service for Corporations The Next Wave

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 Just like you don’t need to be a qualified journalist to build a blogging empire, or train as a professional photographer to be become a high earning Instagram […]

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Gig Workers Are On The Rise Post COVID. Fintech Pirkx Stands To Benefit

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

All around the world, companies and their employees are adjusting to very different working conditions compared to those that existed pre COVID.

For institutions, adapting and surviving over the past 4 months and into the future has meant significant transformation at lightning speed. For some that has meant making productive ‘work from home’ actually work, be it swiftly getting on top of technical issues or implementing technology that helps line managers deal with the complexities of managing people from afar. For others, it has meant pivoting their business, laying off staff and completely rethinking revenue forecasts.

In this period of high uncertainty, contractors that can come in, do the job, then get off the payroll are attractive. Pair that with unemployment driving many into the gig economy, then you have the perfect storm for a swift and significant upheaval in how we typically think about employment and employers, what it looks like, and what benefits a workplace should provide its staff.

For years the gig economy has been a real double-edged sword for a worker. While it promises significant freedoms, it has typically eroded the benefits many would be able to access via their employer – health insurance, pensions to name two common ones.

Both health insurers and pension schemes, particularly in the states, rely on this employer/employee relationship to keep their funnels and inflows full. When that breaks, then there is the potential for systemic issues throughout the chain, through to end benefit providers.

This is why benefit platforms that act as intermediaries to employers need to rethink how they become an intermediary to the contracting sector more broadly.

UK startup Pirkx is doing exactly that, ensuring benefits on its platform are available to all ‘workers’ at a company, regardless of their contract status, however there is a vast ocean of opportunity here for startups looking to take advantage of this cultural shift.

More and more, individuals are being disconnected from traditional social groups, like workplaces. However there is always power in the group, and as humans, we instinctively understand this. This is a strong principle on which to build a compelling offering for a currently marginalised section of the workforce.

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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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Miaowing Debit Card Banks £17.5m From Strategic Investor

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

How do you build a bank differently? Perhaps by taking a design led approach to everything, starting with the sound a debit card makes when it does a contactless payment.

In ANNA’s case, the bank for freelancers and SMEs, that sound is a ‘miaow’.

In February of last year, a miaowing debit card was reported as being enough to catch the attention of the startup’s first 3500 customers. Not bad going for a simple sound effect.

Fast forward to May 2020, and ANNA will surely be feeling like the cat that got the cream, having landed a new strategic investor hot on the heels of a crowdfunding campaign late last year.

In just 19 months since launching, the business has now sold off a majority stake in the bank for £17.5m to ABH Holdings SA, a privately owned, European financial investment group.

ANNA is a mobile business account aimed at the creative industries, startups and freelancers. While many people might cringe at the thought of their debit card miaowing every time they buy a coffee, there’s no doubting there is a niche appeal. Love it or hate it, ANNA’s clever gimmick cuts through so much of boringness that has come to be synonymous with business banking – boringness that has also extended to many of ANNA’s competitors in the fintech startup scene.

While many fintechs boast a design team, ANNA seems to be jam packed with creatives that seem to have actual creative street cred, notably Daljit Singh, a former business partner of veritable design genius Sir Terence Conran, at creative consultancy CONRAN Singh.

A creative edge is what banking and finance needs. Many fintech technology companies have promised it, but so few have delivered. If ANNA are brave enough to launch a debit card that miaows, and idea that almost surely would have been relegated to the ‘not under my watch’ bin at most banks, then it will certainly be interesting to see what sort of features they are brave enough to launch next, now that they’ve landed some serious cash.

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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UK’s Countingup and Pento Demonstrate How To Put The Customer First & Win

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

Innovation comes to the fore in times of need, and fintech companies around the world have been putting their skills to good use.

Given most individuals and businesses are asking themselves the same question – ‘what does this crisis mean for me, financially?’ – it makes sense that tools that help people and businesses answer this very question would some of the first examples of the problem/solution orientated thinking startups are renowned for.

Take innovative payroll provider Pento, who has launched a Coronavirus Furlough claim calculator, to work out how much employers can claim under the UK’s scheme. Navigating government rules and having confidence in your own interpretations is hard at the best of times, and an added pressure many business owners and finance teams will be struggling to find headspace for. Pento has elegantly tapped into a core pain point for their customers, and most likely the thousands of prospective customers they will attract through this simple but timely value add to their service.

They’re not the only fintech to get in on the game.

Countingup, which just last week announced the completion of a £4m funding round, has also built a calculator specifically aimed at helping sole traders understand their entitlements. The ING Ventures backed mobile banking and accounting app has also lifted itself up beyond pure technology enabled solutions, and it actively campaigning the UK government to do more to help small businesses. Its open letter garnered the support 250 accountancy firms across the UK and demonstrates to its customer community it is in this together with them.

Advocacy and campaigning is the type of hustle a startup can do. While banks grapple with big and tricky issues as a result of the crisis, which no one envies them for, grass roots activism for SMEs is there for the taking. Hearts won now will be hearts won for a very long time.

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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Trading Through Turbulent Times: Opportunities For Payments’ Fintechs & Investors

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 many fintech companies and new financial technologies (hello Bitcoin), COVID-19 is proving to be their first real stress test. If they can survive the next 12 to 24 months, it’s a strong signal these aren’t the tech upstarts or flash-in-the-pan ideas that many had pegged them as.

Square, which reports its 2020 Q1 earnings after the bell rings today, will be watched very closely by many, with exactly this in mind. Payment volumes are expected to be lower, based on a mixture of lockdown restricted trade and falls in consumer spending. Some reports suggest $3 out of every $5 in payments processed by the fintech are based on in-store discretionary spending.

The ‘payments pandemic’ has been felt more locally too, notably by Australian fintech Tyro. It has kept investors calm by publishing weekly transaction value updates, in an effort to provide transparency as to the impact of COVID-19 on the business’s operations. April volumes were down just under 40%, compared to the same period last year.

Square and Tyro have relatively different customer bases, however there is no denying the underlying trend in falling payment volumes for all bricks and mortar payments businesses and banks. What can be said is that trading through this period and adapting is key, as are local nuances around lockdowns and restrictions on trade. While Australia has been able to implement a more broad-based approach, it could be said trade in the US has benefitted from less consistency, potentially at the expense of its residents.

Another fintech payments and banking upstart, Revolut, is reported to be looking to use the pandemic to its advantage by snapping up distressed competitors. The company has been plagued by news of churn amongst senior staff, but its growth remains bullish, and its war chest full, after landing a $500M cash injection from Silicon Valley investors.

Bitcoin is also showing tentative signs of a recovery, after a sharp sell-off in March. If it can weather the storm of the next few years, it could edge even further into the mainstream.

The coast is far from clear, but like all businesses, if these fintechs, and Bitcoin, can steadily trade through these turbulent times, their probability of longevity seems on the up. For payments’ fintechs, dips and swings in trading volumes will no doubt impact share prices in the short term, which could mean some good buying opportunities may arise for those investors that feel like they missed out on a good thing the first time around.

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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Fintech Lenders Moula & Prospa Winners In Government Loan Scheme

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

SME fintech lenders Moula and Prospa have been bought into a landmark government guarantee scheme – the Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme – that will see up to $40 billion in lending make its way to Australia’s hard-hit SME sector in the coming months.

The announcement has the potential to transform the two lenders into ‘household names’ in the SME finance space, marking a significant new turning point for both fintechs.

As part of the history-making COVID-19 stimulus measures in Australia, the government will look to guarantee 50% of new loans issued by participating lenders to SMEs.

Loans will be unsecured, and come with a 6-month repayment holiday. The borrowing limit under the scheme will be capped at $250,000, and all lenders will use their usual discretion in setting lending limits.

The push to keep SMEs afloat is being complemented with the government’s JobKeeper program. Eligible SMEs – namely those that can demonstrate a turnover reduction of 30% or more – will be entitled to access a fortnightly subsidy of $1500 per eligible employee, to keep paying their employees. The program runs until September of this year.

Another large Australian neobank, Judo Bank, has also been added to the list of approved lenders.

Many fintech lenders are significantly more expensive than traditional banks, however there is potential now for non-bank lenders to revaluate their risk/reward matrix, and strongly compete. There is no doubt speed of financing is key in the current environment, and it is arguable fintechs already have a leg-up in this regard.

However the competition – traditional banks – aren’t going to waste a good crisis either. NAB’s COVID-19 business loan is priced at the very attractive 4.5% p.a. As a bank emerging out of a series of high profile, brand damaging moments over the past two years, due to the Royal Commission, being able to execute over the next 12 months will be key to winning back market share and trust for the blue chip.

This competition is definitely going to get interesting, and SMEs will be the winner.

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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Fintech Lenders Incentivised To Help SMEs Navigate Stimulus Packages

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

As governments unleash rapid amounts of COVID-19 stimulus money for SMEs, one thing seems to be consistent between business owners across the world; utter confusion. With policy changing rapidly, small businesses owners are finding it difficult to assess their eligibility for government assistance, not to mention private sector help. All this is framed against a backdrop of shifting lockdown laws and restrictions, and employees working from home. Not a fun time at all.

It’s an equally confusing time for fintech lenders, who are scrambling to get their heads around what companies in their book are most likely to stop making repayments, and what companies they should be lending to going forward. There is no question some businesses are booming right now, but working out what industries are experiencing ‘flash-in-the-pan’ growth verses sustainable long-term growth is like reading tea-leaves.

In the midst of all of this, is a real opportunity for lenders to do something significant for the small business community, and also protect their own book. This would be to value-add by helping SMEs quickly navigate and access the funding support from governments that they are eligible for. This would de risk the client from a lending perspective, plus truly differentiate the lender from its peers.

Government policies are hard to interpret at the best of times, and offering simple online eligibility calculators and application assistance would I’m sure be hugely welcomed by time poor business owners. Many are in a position where they need to rapidly rethink and pivot elements of their business. How can they be expected to do this, while worrying about applying for funding, or reading screeds of government fine print?

It’s far from business as usual, and lenders who want to survive are being handed the perfect opportunity, on a platter, to do something of real value for their client base, so that both can survive the crisis.

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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