Stripe vs Adyen Financials: 2023 Update; Apple launches savings accounts with 4.15% interest rate; Now you can pay a small business in Brazil on WhatsApp;
In this edition:
1️⃣ Visa partners with PayPal, Venmo and others to power interoperable digital payments
2️⃣ Now You Can Pay a Small Business in Brazil on WhatsApp
3️⃣ Fintwit
4️⃣ Fintech has taken home the biggest slice of venture capital funding in Europe
5️⃣ Apple launches savings accounts with 4.15% interest rate
6️⃣ Real-Time Payments on Plaid Transfer
7️⃣ Stripe vs Adyen Financials: 2023 Update
And many more….
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Visa partners with PayPal, Venmo and others to power interoperable digital payments
Visa is partnering with a host of financial service and payment companies for a new interoperable peer-to-peer (P2P) payment offering, one that allows people to transfer money to friends even if they use a different payment service.
While digital payments have inarguably transformed the world of commerce, the sheer number of payment apps out there has hindered people’s ability to send money to other people without a little friction. If they’re both using PayPal, things work well. But if they’re not, then they either have to do a bank transfer or juggle multiple different P2P payment apps.
Visa+, as Visa’s new service is called, is designed to solve that problem. Later this year, Visa+ will power a new integration allowing Venmo and PayPal users in the U.S. to transfer money between the two platforms. It’s worth noting that while PayPal does in fact own Venmo already via its former parent eBay’s $800 million Braintree acquisition a decade ago, it has hitherto not been possible to transfer money in real time between the two services.
With Visa+ activated, neither user in a PayPal / Venmo transaction will be required to have a Visa card associated with their respective accounts. Visa merely serves as the infrastructure and connecting glue between the two services — the user sets up their own unique payment handle that’s linked to their PayPal or Venmo account, and then shares that handle with whoever they want to be paid by. This means nobody has to share mobile phone numbers, email addresses or other personal details, which may prove particularly useful for one-off payments between people who are unlikely to interact again in the future.
Other companies that have committed to Visa+ for today’s announcement include Western Union, TabaPay, i2C and DailyPay, which Visa says will go some way toward extending Visa+ to myriad use cases, including the gig and creator economies, as well as online marketplaces.
There are, of course, a swath of high-profile omissions from Visa’s initial roster of partners, including the likes of Cash App and major digital wallet providers such as Google and Apple. However, interoperability is emerging as a key bone of contention across the digital landscape including payments, with the Linux Foundation recently launching the Open Wallet Foundation to support interoperability between digital wallets. Visa+ fits into that broader push, albeit with limited scope in its initial guise — but Visa will likely be pushing for more third parties to join ahead of its rollout.
Visa said that it plans to start making Visa+ available for consumers later this year, with general availability to follow in mid-2024.
Source Techcrunch
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Now You Can Pay a Small Business in Brazil on WhatsApp
This is another good for social commerce platforms like botcommerce where our customers can start their sales on WhatsApp.
Starting today people across Brazil will be able to pay their local small business right within a WhatsApp chat. This seamless and secure checkout experience will be a game-changer for people and small businesses looking to buy and sell on WhatsApp without having to go to a website, open another app or pay in person. We’re rolling out today to a small number of businesses and will be available to many more in the coming months.
In Brazil you can search for a business, browse goods and services, add them to your cart, and make a payment all with just a few taps. We’re excited to finally unlock this ability for people and businesses right within a chat.
It’s now possible to pay for goods and services using Mastercard and Visa debit, credit and pre-paid cards issued by the numerous banks participating in the service. Small businesses using the WhatsApp Business app can link a supported payment partner — such as Cielo, Mercado Pago or Rede — and create an order within the app to securely accept payments from their customers.
Just like every feature in WhatsApp, payments are designed to be secure. Card numbers are encrypted and securely stored, and people are required to create a Payment PIN and use it for each payment. We also offer customer support to ensure help is available, if needed.
We’re excited to hear how this service helps people and small businesses in Brazil connect on WhatsApp, and look forward to bringing it to more types of businesses and countries in the future.
Source Whatsapp
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Fintwit
Twitter partners with eToro to let users trade stocks, crypto as Musk pushes app into finance
Twitter will let its users access stocks, cryptocurrencies and other financial assets through a partnership with eToro, a social trading company.
Starting Thursday, a new feature will be rolled out on the Twitter app. It will allow users to view market charts on an expanded range of financial instruments and buy and sell stocks and other assets from eToro, the company told CNBC exclusively.
Currently, it’s already possible to view real-time trading data from TradingView on index funds like the S&P 500 and shares of some companies such as Tesla. That can be done using Twitter’s “cashtags” feature — you search for a ticker symbol and insert dollar sign in front of it, after which the app will show you price information from TradingView using an API (application programming interface).
With the eToro partnership, Twitter cashtags will be expanded to cover far more instruments and asset classes, an eToro spokesperson told CNBC.
You’ll also be able to click a button that says “view on eToro,” which takes you through to eToro’s site, and then buy and sell assets on its platform. EToro uses TradingView as its market data partner.
The partnership marks a rare and noteworthy business deal for Twitter since Elon Musk took the reins as CEO after buying the platform for $44 billion last year.
Founded in Israel in 2007, eToro is an online brokerage that lets users buy and sell stocks, cryptocurrencies and index funds.
Among its most popular features is a function that allows people to mimic the trading strategies of other users. The company has more than 32 million registered users across Europe, Asia and the United States, Assia said.
‘Fintwit’
Assia said that “Fintwit,” or financial twitter, has become a popular trend on the app, which many people use to find breaking news and updates on stocks and other assets. Twitter was a key platform involved in the boom in retail trading in 2021.
Twitter added pricing data for $Cashtags in December 2022. Since the start of 2023, there have been more than 420 million searches for Cashtags, with the number of searches averaging about 4.7 million a day.
Musk has made it his mission to turn Twitter into a so-called “super app.” Such apps tend to offer users a range of services such as instant messaging, banking and travel.
The concept has proven wildly popular in East Asia. In China, internet giant Tencent offers payments through its WeChat messaging app.
Earlier this week, Musk changed the corporate name of Twitter to X Corp after merging with a shell company with that name, according to a court filing, highlighting his ambition to turn the firm into a super app.
Source CNBC
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Fintech has taken home the biggest slice of venture capital funding in Europe
But funding figures for 2023 so far suggest it may struggle to hold onto its lead this year.
European fintechs raised $2bn in the first quarter of 2023 — a massive 83% drop from this time last year. That’s less than the total raised by climate tech startups ($2.6bn) and deeptech startups ($2.9bn).
Have VCs fallen out of love?
In the first quarter of 2022, European fintechs raked in $9.7bn.
In 2023, things are much more subdued. The overall amount raised was down to $2bn in the first quarter, and the number of fintech deals closed was also down.
212 rounds were signed in the first three months of the year — the smallest number since Q4 2015, when it also stood at 212. For the past seven years, more than 300 rounds has been the norm each quarter for fintech.
Megarounds are dead
In the first quarter of 2022, overall fintech funding was buoyed by some hefty megarounds (deals of $100m+), including Checkout.com’s $1bn Series D and Qonto’s $552m Series D.
In the first quarter of 2023, only two European fintechs raised megarounds: UK consumer lender Abound (formerly Fintern), which raised a £250m growth equity round from GSR Ventures, Hambro Perks and K3 ventures in March; and French crypto infrastructure startup Ledger, which raised a $109m Series C in March from investors including Molten Ventures, True Global Ventures and Cathay Innovation.
This time last year, the smallest of the 10 largest fintech funding rounds was Wayflyer’s $150m Series B.
Consumer fintech is out of vogue
Business-facing (B2B) fintechs raised $950m in the first three months of the year, almost double that of their B2C peers ($596m) — although the total was skewed by Abound’s large £250m raise.
B2B fintechs closed 128 deals in the first quarter of the year, compared to just 35 B2C deals.
Consumer fintechs also accounted for the lion’s share of M&A and insolvencies in the period; one notable B2B exception being banking-as-a-service platform Railsr’s firesale at the beginning of March.
UK circular economy fintech Twig acquired French neobank for teens Vybe, US savings app Acorn acquired kids neobank GoHenry, and digital bank Zopa acquired BNPL fintech DivideBuy.
Consumer-facing fintech insolvencies are also gaining ground. The latest was UK sustainable investing app Clim8, which shut down in March, following crypto investment app Nuri’s insolvency near the end of last year.
Source Sifted / Amy O’Brien
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Real-Time Payments on Plaid Transfer
How it works:
Plaid supports a variety of businesses and verticals like personal lending, marketplaces, insurance, brokerages and digital investment platforms — all using Instant Payouts to enable immediate access to money, for their customers.
Let’s dive into a real-world example with one of our early adopters, MyBrandForce. MyBrandForce is disrupting the retail execution space by connecting innovative brands with the power of an on-demand workforce. We are partnering with MyBrandForce on Instant Payouts to ensure their trained Brand Agents can receive their hard-earned wages on demand, in real-time.
- Link the account and check for eligibility: Prior to the payout experience, the Brand Agent onboards to the platform and links their bank account with Plaid to receive future earned wages. At this time, Mybrandforce can confirm if the linked account is eligible for RTP. If yes, the Brand Agent is eligible for Instant Payouts.
- Elect Amount to Payout: In this example, the Brand agent has $71.00 in earned wages available for Instant Payout. They agree to initiate the payout of $71.00.
- Payout Initiated: The consumer is immediately prompted that the Instant Payout has been initiated.
- Instant Payout Received: Within seconds, the funds are received within their bank account.
Their platform allows brands of all sizes to perform scalable field services and acquire real-time observational data from trained Brand Agents across the country. The ability for their Brand Agents to receive their funds in real-time differentiates them from other gig platforms where Instant Payouts often come at a price.
Source Plaid
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Stripe vs Adyen Financials: 2023 Update
Comparisons of Financials
I. Total Payments Volume
Adyen surpassed Stripe in 2022 in terms of total payments volume, though the two are pretty close.
- Adyen did $829B in 2022 TPV, growing ~49% y/y
- Stripe did $817B in 2022 TPV, growing ~28% y/y
If you look at a 2 year period from 2020 to 2022,
- Adyen went from $328B to $829B growing ~59% y/y
- Stripe went from $400B to $817B growing 43% y/y
So, Stripe was ahead during the pandemic, but Adyen continued to grow strongly in 2022.
II. Gross Revenue
Though the two have similar TPVs, Stripe has a 50% higher gross revenue than Adyen!
- Stripe’s gross revenue was ~$14.3B and grew ~19% y/y (slower than TPV)
- Adyen’s gross revenue was ~$9.7B and grew 52% (roughly in line with TPV growth)
Looking at it in terms of take rate: Stripe’s gross revenue take rate is 1.75% and Adyen’s is 1.16%, so Stripe is able to extract 50% more revenue on a same-sized transaction as Adyen.
Of note, however, is that Adyen’s gross take rate is holding steady over time, while Stripe’s has been declining.
III. Net Revenue
Stripe makes almost double the amount of net revenue as Adyen!
- Stripe’s net revenue was $2.8B in 2022 growing 12% y/y
- Adyen’s net revenue was $1.44B in 2022 growing 33% y/y
On a net take rate basis, Stripe’s 0.34% is exactly double that of Adyen’s 0.17%. What’s going on?
A large part of it is driven by Stripe having a 50% higher gross take rate to begin with. In addition, Stripe pays out ~80% of its gross revenue to other institutions, while Adyen pays out 85% of its gross revenue, so that compounds the net revenue differential!
IV. EBITDA
So what about the bottom line?
- Adyen had $0.8B of EBITDA in 2022, corresponding to 55% EBITDA margins on Net revenue
- Meanwhile, Stripe had negative EBITDA in 2022. In 2021, it made hundreds of millions of EBITDA, so it went from profitable to not during the course of 2022.
V. Market Cap
- Adyen trades in the public markets at a market cap of $48B
- Stripe recently raised a down round at a market cap of $50B
Adyen is more profitable, has higher TPV, and is growing faster, so from that perspective, the $50B of Stripe may seem a bit high, though Stripe does have double the revenue base if it can increase its efficiency and profitability. Below are some of the market cap multiples on various metrics:
Financials Summary
To summarize:
- Stripe and Adyen have similar TPV ($817B vs $829B) but Adyen is growing faster (49% vs 28%)
- Stripe has ~1.5x the gross revenue of Adyen ($14.3B vs $9.7B)
- Stripe has ~2x the net revenue of Adyen ($2.8B vs $1.4B)
- Adyen has close to a billion $ more in EBITDA (negative vs 0.8B)
- Stripe has a slightly higher market cap ($50B private vs $48B public)
Source Tanay Jaipuria
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Saving account, say no more! Apple launches savings accounts with 4.15% interest rate
Apple Card customers in the U.S. can open a savings account and earn interests starting today. When the company originally announced the new financial product back in October, Apple said that it couldn’t share what interest rate would be paid out on these accounts because rates are fluctuating so much these days.
As of today, Apple is going to offer an APY of 4.15%. It looks like a competitive offering when you look at data from Bankrate — you can currently find savings accounts that offer an APY of 3.5% to 4.75%. The company isn’t making any promise when it comes to future interest rates. It could go up and down at any time.
Apple has partnered with Goldman Sachs once again for the banking feature. Savings accounts are technically managed by Goldman Sachs, which means that balances are covered by the Federal Deposit Insurance Corporation (FDIC).
This high-yield savings account has been created specifically for Apple Card customers. When customers pay with their Apple Card, they get cash back on all purchases. By default, all purchases grant you 1% in cash rewards and 2% for all purchases made using Apple Pay. Purchases with select merchants unlock 3% in rewards.
By default, customers receive cash rewards every day into Apple Cash, a pocket of money that appears in the Wallet app and that works more or less like a checking account. Your Apple Cash balance can be used to pay for things using Apple Pay, for your credit card balance or to send money to friends and family members. You also can transfer this balance to a regular bank account.
Starting today, Apple Card users can choose to deposit their daily rewards into their savings accounts. It’s a way to save money without having to think too much about it.
Your savings account is accessible from the Wallet app as well. You can see your current balance, the current interest rate and your most recent transactions. From this screen, users can also manually add or withdraw money. The balance can be transferred to Apple Cash or a regular bank account.
“Savings helps our users get even more value out of their favorite Apple Card benefit — Daily Cash — while providing them with an easy way to save money every day,” Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, said in a statement. “Our goal is to build tools that help users lead healthier financial lives, and building Savings into Apple Card in Wallet enables them to spend, send, and save Daily Cash directly and seamlessly — all from one place.”
There are no fees associated with Apple’s savings account. However, there is a maximum balance limit of $250,000. The APY of 4.15% applies to any sized balance and there is no minimum balance required.
Source Techcrunch / Romain Dillet
