Big news from big companies this week as fintech giant FIS announced it would spin off Worldpay, Stripe burned through $500 million of cash in 2022, and Apple Pay Later detailed some of its underwriting plans. We also had a move for Lael Brainard, the case for crypto-friendly banks and more. Here are what I consider to be the top ten fintech news stories of the past week.
FIS takes $17.6 billion hit in merchant unit to be spun off from Reuters – Since buying Worldpay in 2019 the market value of FIS has halved and now the company has announced it is giving up trying to make Worldpay work. It will spin off Worldpay in the next 12 months and take a $17.6 billion writedown.
Stripe Burned Through More Than $500 Million in Cash Last Year from The Information – We gained more insight into the finances of our most valuable private fintech company this week. Stripe’s net revenue growth slowed to 18%, down from 85% in 2021, to just over $2.8 billion but the shocking number was the $500 million of cash it burned through in 2022, after generating $400 million in cash in 2021.
Apple to Scrutinize Customer History for New ‘Buy Now, Pay Later’ Service from Bloomberg – More information keeps trickling out about Apple’s coming BNPL offering. Apple Pay Later will take into account your spending history with Apple and even which of their devices you own. It will also look at the credit cards you connect to Apple Pay, including its own Apple Card.
Lael Brainard Set to Lead White House National Economic Council from The Wall Street Journal – This week President Biden named Federal Reserve Vice Chair Lael Brainard to be his top economic advisor and director of the National Economic Council. She had served on the Federal Reserve Board of Governors since 2014 and was involved in the FedNow rollout.
The case for more crypto-friendly banks from American Banker – The concentration of crypto among a handful of small banks has not turned out well. The government appears intent on distancing crypto from the banking system but the question needs to be asked: would bringing crypto closer to the banking system make it safer and be better for consumers?
Banks Are Breaking Up With Crypto During Regulatory Crackdown from The Wall Street Journal -Case in point on the previous topic is the retreat that banks are taking from the crypto sector. Banks such as New York’s Metropolitan Commercial Bank have announced they are closing their crypto business and even fintech startups are being more careful. Mercury now asks potential new accounts if they are related to crypto in the sign-up process.
Are Amazon, Google, And Microsoft Too Powerful In Cloud Banking? from Forbes – A Cornerstone Advisors study found that three-quarters of U.S. banks and credit unions have—or expect to have by the end of 2023—apps running in the cloud. The U.S. Treasury is concerned that there are only three big tech providers to choose from and this could lead to increased risks for banks.
Marketplace lending loan portfolios: Credit analysis, collateral performance, and valuations in transitory markets from Fintech Nexus – In this widely shared guest post, Gunes Kulaligil from Stout provided a detailed update on the state of marketplace lending today. By studying the performance of the public securitizations he showed that volume was up in 2022 but net loss rates have been steadily increasing since mid-2021.
Binance Considers Pulling Back From US Partners as Crypto Crackdown Escalates from Bloomberg – The world’s largest crypto exchange, Binance, is considering a complete withdrawal from the US market after coming under intense scrutiny from regulators. Binance US claims to be independent of Binance and it claims to have no intention to leave the US. Stay tuned on that one.
Upstart’s 2022 was ‘a gift’ full of slipping financials from Fintech Nexus – Upstart reported earnings this week and not surprisingly it was an ugly report. CEO Dave Girouard tried to spin 2022 as a gift, in that it highlighted the areas where the company needed to improve. Q4 revenue was down 52% year over year with profit down 45%.
Every Thursday afternoon, the Fintech Nexus News team and a special guest discuss the news of the week live on YouTube, LinkedIn, and Twitter. We have now made the show available in podcast format – click on the audio player below.