Stripe leads the news again this week as we discovered they may not go public this year after all and may instead raise a substantial private funding round. Also making news was American Express launching new tools for small business, community banks want more time to connect with APIs, the CFPB wants to cap credit card late fees, SoFi’s solid earnings report and more. Here are what I consider to be the top ten fintech news stories of the past week.
Thrive Capital Said to Lead Potential Investment in Stripe from The New York Times – The rumor is that Stripe is raising a new private funding round of up to $3 billion with Thrive Capital reportedly in for $1 billion. The valuation is expected to be between $55 billion and $60 billion, a very impressive number but still more than 30% below their high watermark.
American Express Launches Financial Management Tools For Small Businesses from Forbes – The Kabbage brand is no more as American Express launch their Business Blueprint tool based on the technology developed by Kabbage. The new tool gives small businesses a central place to manage their finances combining cash flow insights, a digital bank account and credit products.
Small banks, fintechs ask CFPB for more time to phase out screen scraping from BankingDive – As the CFPB mulls new rules for financial data sharing small community banks are asking for more time before they need to transition to API connectivity. The Independent Community Bankers of America says a sudden move would put community banks at a disadvantage and their members want 5-8 years (really?) to complete this transition.
Consumer Financial Protection Bureau targets excessive credit card fees in new rule proposal from CNBC – Staying with the CFPB, they also want to crack down on credit card fees. While Congress banned excessive fees in the CARD Act of 2009 but companies have exploited a loophole to keep charging high fees. The new proposal would limit late fees to $8 which could lead to a $9 billion reduction in total fees earned by banks.
SoFi’s bank charter drives positive outlook, but layoffs hit tech unit from American Banker – SoFi announced earnings this week and it was a solid report, beating analysts expectations. The leading fintech earned a record $443 million and bank deposits increased from $1 billion to $7.3 billion. While the number of customers increased 51% to 5.2 million it wasn’t all good news with their technology unit announcing layoffs amounting to 5% of its workforce.
The Wallet Wars Are Not About Money, They Are About Identity from Forbes – In this really interesting piece by Dave Birch, he maintains that digital wallets should not be about payments but rather they should focus on digital identity. If banks want a major role in digital wallets they should focus on becoming the custodians of digital identity.
Celsius Problems ‘Dated Back to at Least 2020’: Examiner’s Report from Decrypt – As part of the Celsius bankruptcy proceeding the court-appointed examiner released a scathing report this week, pointing out serious problems dating back to 2020 or even earlier. The company even managed to lose money during the crypto bull run of 2021-22.
The Unusual Crew Behind Tether, Crypto’s Pre-Eminent Stablecoin from The Wall Street Journal – The stablecoin Tether has always had somewhat of an air of mystery about it, with a years ago promised audit of reserves still not forthcoming. The WSJ took a look at the four men who control 86% of Tether Holdings painting the clearest picture yet of the people behind the world’s largest stablecoin.
Upstart Laying Off 365 Employees as Loan Originations Decline from PYMNTS.com – In our weekly layoffs feature, Upstart leads the way, announcing this week that it is cutting 20% of its workforce, or 365 people, in response to the challenging macro environment.
Alarm bells, arrogance and the crisis at Wells Fargo from American Banker – If you are looking for an absorbing weekend read then check out this five-part feature on Wells Fargo. Kevin Wack was able to obtain direct access to some of the people at the center of the fake accounts scandal that plagued the bank last decade.
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.