Fintech darling Stripe has first-world problems; How to build a banking marketplace; Revolut dealt banking licence setback by its own accountant;

Sam Boboev
12 min readMar 8, 2023

In this edition:

1️⃣ API coverage and maturity are constantly growing

2️⃣ Survey Reveals Financial Industry’s Top 4 AI Priorities for 2023

3️⃣ Shopify Announces Fourth-Quarter and Full-Year 2022 Financial Results

4️⃣ How to build a banking marketplace

5️⃣ Fintech darling Stripe has first-world problems

6️⃣ Revolut dealt banking licence setback by its own accountant

7️⃣ The winning ingredients for social commerce in China

And many more….


API coverage and maturity are constantly growing

APIs are growing in strategic importance within banks, which have increased efforts to prioritize and build API road maps. Across the industry, the business side of banking broadly acknowledges the strategic importance of APIs, but we observe an opportunity to improve the operating model: IT leaders still point to an absence of effective business-driven prioritization and strong governance as the primary roadblocks to widespread adoption. Since the last survey of Mckinsey, governance and business and IT collaboration in API programs have not improved and remain a critical pain point. One IT head noted, “Some organizations continue to not understand what APIs are and how the business can benefit from them.”

As one indicator of these roadblocks, funding for APIs has declined compared with previous years. Potential reasons include APIs not being as embedded in the business case life cycle, and a reduced focus on regulatory programs that require APIs. Companies must reassess whether the current structure for API programs can deliver on their timelines.

Meanwhile, survey respondents report increased technological maturity. The industry has benefited from the proliferation of API developer portals for fast and efficient publishing and usage. Further, the establishment of more standards and guidelines, as well as the introduction of an API taxonomy, facilitate development and reuse.

Some leading companies have achieved a technological maturity that outpaces the business side’s understanding. At one large European bank, the IT function was technologically ready to provide an appealing loan offering through APIs to a niche group, but it took the business more than six months to deliver its part and go to market with the product. Banks must evolve their business processes to make full use of the new power of APIs.

The people dimension also continues to improve. The prevalence of an API-first culture within banks has jumped significantly, indicating that APIs are playing a more important role in decision making. This trend is also reflected in the growing number of training and awareness programs at banks to develop internal talent. As in other industries, financial institutions have found it challenging to attract the necessary talent to develop and lead API initiatives.

Source McKinsey


Survey Reveals Financial Industry’s Top 4 AI Priorities for 2023

Five hundred respondents from the world’s leading financial services institutions shed light on expected and not-so-expected results regarding where they see AI having the best return on investment.

Banks Seeing More Potential for AI to Grow Revenue

The survey found that AI is having a quantifiable impact on financial institutions. Nearly half of survey takers said that AI will help increase annual revenue for their organization by at least 10%. More than a third noted that AI will also help decrease annual costs by at least 10%.

Financial services professionals highlighted how AI has enhanced business operations — particularly improving customer experience (46%), creating operational efficiencies (35%) and reducing total cost of ownership (20%).

For example, computer vision and natural language processing are helping automate financial document analysis and claims processing, saving companies time, expenses and resources. AI also helps prevent fraud by enhancing anti-money laundering and know-your-customer processes, while recommenders create personalized digital experiences for a firm’s customers or clients.

Download Report


Brazil central bank greenlights Meta’s WhatsApp merchant payment system

Brazil’s central bank on Thursday approved Meta Platforms’ payments launch for small and medium-sized business in Brazil via its messaging application WhatsApp, building on the app’s existing local peer-to-peer payment system.

The approval comes as Meta seeks to use the Brazilian market as a key test space for business messaging, an area that has assumed greater urgency as Meta’s core advertising business has stalled.

WhatsApp users in Brazil have been able to make payments between users through the application since 2021, but the new development clears the way for merchants to receive payments.

“Soon, WhatsApp users will be able to pay for products and services directly in a conversation with Mastercard and Visa debit and credit cards,” Guilherme Horn, head of WhatsApp Latin America, said in a Linkedin post.

Shortly after the central bank’s greenlight, Meta’s chief executive Mark Zuckerberg said on his Instagram broadcast channel that “people will be able to pay small businesses right on WhatsApp”.

Source Reuters


Shopify Announces Fourth-Quarter and Full-Year 2022 Financial Results

Enabling First Sale To Full Scale

- Rolled out Shop Promise, a consumer-facing badge that provides accurate anticipated delivery dates across a merchant’s online store, checkout, and on the Shop app. With the release of our Editions last week, we have started to expand Shop Promise beyond just Shopify Fulfillment Network (“SFN”) merchants to all eligible U.S. merchants. For merchants using SFN, Shop Promise is now automatically enabled and will appear on merchant storefronts, guaranteeing faster, more reliable delivery and up to 25% higher conversion rates.

- Released Hydrogen and Oxygen helping merchants fast-track their custom storefront build with the tooling they need to accelerate development using Hydrogen, our React-based headless commerce stack. And with just one click, merchants can deploy their Hydrogen storefronts on Oxygen, our global hosting solution at no additional cost. Within Editions, on February 9th we released Hydrogen 2 — now built on Remix and made Oxygen available to more Shopify plans.

- Launched Shopify Tax, which offers robust tax compliance tools for U.S.-based merchants that sell to customers in the United States, including sales tax liability insights, product category suggestions, and precise calculation technology to collect tax based on specific addresses within 11,000+ United States tax jurisdictions.

- Launched Shopify Functions, which enables larger and enterprise brands to customize out-of-the-box Shopify features to meet their unique needs without ever touching software code.

Reducing Barriers As Shopify Helps Merchants Go Global

- Completed the roll out Shopify Markets to all merchants and launched early access in the U.S. of Shopify Markets Pro, a native end-to-end cross border solution with a merchant of record offering that enables merchants to enter 150+ markets overnight.

Launched Shopify Payments in France, Finland, Czech Republic, Switzerland and Portugal, expanding the availability of Shopify Payments to 22 countries.

- Launched Shopify POS in Belgium, Denmark, Finland, Italy, Spain, and Singapore, bringing the total number of countries where we offer our POS hardware integrated with Shopify payments to 14 countries.

- Launched Shopify Capital in Australia, expanding the availability of Shopify Capital to four countries.

- Introduced Shopify Shipping to merchants in France, Italy, and Spain, expanding the availability of Shopify Shipping to seven countries.

Source Shopify


How to build a banking marketplace

Many banks want to follow the marketplace path, but don’t know where to start.


The first stage in creating a marketplace is to define the platform business model that the bank wants — B2B (like Alibaba), B2C (Amazon) or P2P/C2C (eBay). The first model is a relationship-driven option whose customers are businesses; the others are product-driven platforms targeting individuals and households. Whichever model the bank chooses, it must be carefully designed to complement the bank’s offerings, and it must encapsulate services around each proposition.

Next, it must reconsider how its business model should change to evolve from a traditional bank that provides straightforward banking instruments (accounts, credit cards and loans) to a financial partner offering products (cars, houses, jewellery) and services (travel, weddings, education) that are wrapped with banking instruments.


Living Banks succeed by designing with the customer experience front and centre. Consequently, marketplaces must be designed as a venue that is not business-focused but customer-focused, providing a space for the bank to bring products to customers.

Doing so means that as soon as the customer enters the marketplace — and even before, in the case of partnerships and integrating with social media platforms — he or she represents the key focus for the bank, which can offer every necessary service without that customer having to go anywhere else.


Pursuing a marketplace solution requires that banks create specific new set-up capabilities to deliver and sustain platform banking. That starts by assessing their existing capabilities with a particular focus on platform-related areas like governance, innovation, and data and analytics.

Next, banks must activate a number of enablers to pursue their platform agenda. Among these: design first and foremost for a mobile customer experience; use analytics and AIpowered connected experiences to optimise hyper-relevancy; use bots to provide meaningful, fuss-free interactions for customers; create an API factory; and measure progress using a new KPI structure.

Finally, it’s worth noting that coalitions are foundational to successful marketplaces, which are attractive to potential partners. Take insurance companies: the value proposition includes being able to cross-sell products and capture leads at specific customer life moments.


The changes sweeping through the banking sector leave players with one of two choices: take action, as some have done, or do nothing and hope that will suffice. The problem with the second course is that it won’t. Banking faces significant disruption, and it is highly susceptible to it — and that means players are in a fight for survival.

Source Accenture


Fintech darling Stripe has first-world problems

When a startup raises cash at a lower valuation than before, it’s usually a bad sign. When it’s a fintech darling previously valued at $95 billion, the whole industry takes notice. Patrick and John Collison are seeking fresh funds for the company they co-founded 13 years ago while exploring options to take it public, according to people familiar to the matter. Though a solid business model and rapid growth have allowed Stripe to remain private, it has its share of first-world problems.

One of Stripe’s advantages is that its software can process increased payment volumes without a proportional increase in costs. Meanwhile its revenue is linked to the fees it charges for every transaction, after deducting payments to Visa and others. Venture capitalist Paul Graham once called Stripe “the next Google”.

Growth propelled the Collisons to ever-higher valuations. In March 2021 a funding round led by Fidelity and Sequoia valued Stripe at $95 billion, nearly three times the $35 billion price tag it set less than three months earlier. In February the following year investors bought shares in secondary private markets at a valuation equivalent to $220 billion, according to data from ApeVue.

Stripe’s decision to remain private has some downsides, though. Startups tend to lure staff with restricted stock units (RSUs) that allow workers to cash out if the company goes public or is taken over. Stripe has offered such incentives to employees since 2017, but some of those RSUs are due to expire next year. Changing the terms of the stock awards will allow workers to cash in before an initial public offering. However, it triggers a tax liability for employees and the company. Stripe is covering the entire bill. That explains why the company is seeking about $4 billion from investors including Thrive Capital, Reuters reported citing sources.

The problem is that the fundraising environment has changed. Growth in e-commerce has cooled with the return to in-person shopping, while the economy has slowed. That’s affected Stripe’s top line. Gross revenue, a measure of income before deducting payments to Mastercard and others, grew about 27% to $14.3 billion in 2022, down from a rate of roughly 60% in 2021, according to The Information.

The Collisons are also facing squeezed profit margins. The result is that Stripe is back in the red. Its EBITDA was negative $80 million last year, according to Bloomberg, and the company announced layoffs and cost cuts in November. Combine all these challenges with lower public valuations for tech companies — Adyen shares are down roughly a third since Stripe’s last fundraising — and it’s no surprise that the Collisons have lowered their sights.

The company is aiming for a valuation of $50 billion, according to The Information, slightly below the current price for its stock in secondary markets.

Source Reuters


Revolut dealt banking licence setback by its own accountant

Revolut’s pursuit of a UK banking licence is facing a fresh hurdle after the finance app’s own auditor warned that the majority of its revenues may have been materially misstated.

BDO, the UK’s fifth largest accounting firm, said it was unable to fully verify £477m of the company’s revenues for 2021 owing to flaws in Revolut’s internal systems. The sum amounts to more than two thirds of Revolut’s £636m in revenues for the year.

As a result, the auditor issued Revolut with a qualified opinion on its long delayed 2021 accounts.

BDO’s verdict risks increasing scrutiny of Revolut’s claims that it is close to securing a lucrative UK banking licence.

The Bank of England states that companies seeking a licence must ensure that they are operationally ready to carry out the regulated activities at the time of their authorisation and demonstrate how they will meet the required standards at authorisation and on an ongoing basis.

BDO said Revolut’s internal IT systems were “not able to provide sufficient appropriate assurance” over revenue streams from areas of the business including its foreign exchange and wealth department, which includes revenues from crypto trading.

The auditor was forced to revert to methods such as verifying cash balances and cash in client accounts because it had been unable to rely on Revolut’s IT systems and controls throughout 2021.

It added that no reliable documentary evidence of the transactions was produced or maintained outside of the IT system.

BDO said it had identified an “underdeveloped financial control environment” as a “key risk” to Revolut’s operations.

Source Telegraph


The winning ingredients for social commerce in China

The evolution of social commerce in China offers a glimpse of the possibilities. By forging partnerships with wildly popular social influencers and participating in live-stream shopping — an experience that combines instant purchasing of a featured product and audience participation through chat or reaction buttons — brands in China have achieved conversion rates of almost 30% on social platforms. This is up to ten times higher than conversion in conventional e-commerce. Last year, goods and services purchased through live-stream shopping in China represented $132 billion, or 5% of total e-commerce gross merchandise value (GMV). More broadly, Chinese consumers spent more than double that amount — $352 billion (or 13% of total e-commerce) — on all social commerce.

Innovation continues to drive social commerce in China, with challengers quickly gaining scale in particular categories. For example, TikTok (known as Douyin in China) has emerged as a social-commerce leader, particularly in the apparel category. Last year, Douyin’s apparel sales amounted to more than half of what was sold on e-commerce exemplar Tmall, with most of those sales coming from social commerce, including live auctions, a successful innovation in the China market. In this format, which involves both the gamification of product purchasing and a powerful social element with other live users, live-stream hosts often build a rapport with their high-volume customers, chatting with them during the auction. This builds loyalty and a sense of community, which are critical to Chinese consumers, and helps bring VIP customers to auctions on a near-daily basis. However, because of the emotional nature of this format, return rates for purchases are higher than for traditional e-commerce. Thus, ensuring that featured products are of high quality and clear value to the customer is critical in this medium.

Another key ingredient in China’s social-commerce success is the power of influencers and community leaders. Chinese “key opinion leaders” (KOLs) have gained massive followings by becoming subject matter experts in their respective categories. In certain sectors, such as beauty and fashion, these highly professional and marketing-savvy social celebrities can sell millions of dollars of products in minutes and make new products trendy overnight.

Beyond celebrities, “key opinion consumers” (KOCs) also have a significant influence on product sales and brand reputations. These microinfluencers drive social commerce through organic, word-of-mouth recommendations to their personal networks. In many cases, they are not paid directly by brands but are given early access to new products.

Megaplatforms such as Alibaba and Tencent have used the trust they built among Chinese consumers to create a sprawling digital ecosystem and enable the rapid growth of social commerce.

Source McKinsey & Company



Sam Boboev

I am a fintech enthusiast and product leader passionate about crafting simple solutions for complex problems. Subscribe