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Varo’s bank charter milestone, more corporate cards and BNPL under a microscope

Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post…



Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann

First off, I have to say that this past week was one of the busiest fintech news weeks I have experienced in a long while. Whoa. So.much.going.on. While I couldn’t obviously cover it all, I attempted to fit as much of it as I could into this newsletter.

Before we get into the various news items from the past week, let’s talk about bank charters.

For the unacquainted, according to Investopedia: “A chartered bank is a financial institution (FI) whose primary roles are to accept and safeguard monetary deposits from individuals and organizations, as well as to lend money out. Chartered bank specifics vary from country to country. However, in general, a chartered bank in operation has obtained a form of government permission to do business in the financial services industry. A chartered bank is often associated with a commercial bank.”

In 2020, digital bank Varo became the first-ever all-digital nationally chartered U.S. consumer bank — meaning it received approval from the Office of the Comptroller of the Currency to become an actual bank, as opposed to partnering with one as most digital banks do.

It was a bold, and risky, move. So I talked to Varo CEO and founder Colin Walsh to find out if it was worth it. His answer? 100%.

To read my full interview with Walsh on just how things have been going since, head here.

The corporate cards just keep on coming

Mercury announced last week that it launched a new corporate credit card. Via email, a spokesperson told me that the IO Mastercard is designed to help startups scale their business. “It’s straightforward 1.5% cashback on everything, no personal credit check and the first step to qualifying for the card is having just $50,000 in a Mercury account.”

The company added that a corporate credit card has been one of the most requested features from customers since Mercury launched in 2019. In fact, Mercury actually considered launching with a credit card as its first product but instead chose to start with creating a bank account instead since “every founder needs a bank account to run their business…and [they] are the ideal foundation from which to build additional financial features.” The move is admittedly an effort to carve out its own space against the likes of Brex and Ramp.

Meanwhile, European fintech Payhawk announced that it is launching in the U.S. with a focus on enterprise customers. As part of that move, it is also launching its — you guessed it — first credit card product in the U.S. The move follows what a spokesperson describes as “a huge year” for the company: Over the last 12 months, it grew revenue by over 520%. The company achieved unicorn status after extending its Series B round to $215 million.

We’re not done yet! Center, which was co-founded by former Concur CEO and co-founder Steve Singh and launched its own corporate card and expense software offering aimed at small- and medium-sized enterprises, recently shared that in the last year, it tripled its customer base “while retaining 94% of existing customers” and doubled the company size. This is particularly interesting because many of the existing corporate card players often point to Concur as an incumbent that they are trying to replace.

These companies, of course, join a plethora of others in the U.S. already offering corporate cards, including — but not limited to — Brex, Ramp, Airbase, Mesh Payments and Rho.

Image Credits: Mercury

Weekly News

Adyen announced on September 15 that it has become the first fintech to partner with Cash App (Block) to offer Cash App Pay, a mobile payment method, to its U.S. customers. Adyen said its businesses will be giving customers a way to pay using their Cash App balance or linked debit card. Cash App COO Owen Jennings said in a written statement: “As the first financial technology platform outside of the Square ecosystem to launch Cash App Pay, we look forward to seeing the value this partnership brings to our customers and Adyen’s businesses.” An Adyen spokesperson told me via email: “The partnership will provide Adyen business customers access to over 80 million active customers that make up a third of Millennial and Gen Z consumers in the U.S. Their customers, in turn, will be provided with another convenient, seamless way to pay at checkout that fits their unique financial needs and habits.”

Speaking of Block, the company formerly known as (and still goes by sometimes) Square announced last week that its entire ecosystem of more than 35 products and services is now available in Spanish to sellers in the United States. This means that millions of Hispanic-owned businesses in the U.S. will have the ability to use Square in English or Spanish, “including key products like Square Banking to unlock access to financial services and Square for Restaurants to enable seamless, bilingual communication between front- and back-of-house staff.”

While we’re on the topic of payments, Goldman Sachs and Modern Treasury announced they are partnering “to accelerate the shift to embedded payments, helping joint customers embed and scale payments into products.” Via email, a Goldman Sachs spokesperson told me that the partnership furthers “Goldman’s push to better serve mid-market companies that have long wanted to bank with Goldman.” In a written statement, Eduardo Vergara, head of product and sales at Goldman Sachs Transaction Banking, said, “Embedding payments into software products is increasingly the trajectory of commerce, and by partnering with Modern Treasury, we are creating new opportunities for clients to seamlessly leverage our payments capabilities within their own platforms.”

In other Goldman Sachs news, Bloomberg reported that the investment banking and financial services giant is “embarking on its biggest round of jobs cuts since the start of the pandemic.” The publication cited people with knowledge of the matter who said that Goldman “plans to eliminate several hundred roles starting this month.”

Buy now, pay later made headlines several times last week. First, the Associated Press reported that (unsurprisingly, and sadly) while “Americans have grown fond of ‘buy now, pay later’ services… the “pay later” part is becoming increasingly difficult for some borrowers.” Meanwhile, TechCrunch’s Kyle Wiggers reported that the U.S. Consumer Financial Protection Bureau (CFPB) on September 15 “issued a report suggesting that companies like Klarna and Afterpay, which allow customers to pay for products and services in installments, must be subjected to stricter oversight.” Meanwhile, Affirm CEO Max Levchin told Bloomberg Law in an interview: “A fair amount of what the report has called for we have chosen to do. We have always seen this as a lending activity subject to all the lending rules and regulations.”

Proptechs continue to take a hit. Residential real estate marketplace Sundae last week conducted its second layoff this year. About 28% of the team — mostly sales and support staff — were laid off. Specifically, about 106 employees were let go. I reached out to the company for confirmation and a spokesperson told me via email that “Sundae is focusing on creating a more streamlined customer experience so that we can get offers to sellers even faster. The market remains volatile and we saw layoffs as an opportunity to use data and technology to streamline our approach and improve our customer experience.  We also saw these decisions as an opportunity to build a longer runway.” I covered the company’s 2021 raise here.

In more uplifting personnel news, Forage — a payments processor that aims to make it easier for grocers to accept SNAP EBT payments online — revealed that Kristina Herrmann is joining the company in the new role of chief business officer. She comes to Forage after nearly 16 years at Amazon, where she most recently built out and led the company’s underserved populations team as its founder and general manager. Earlier this year, I wrote about how Ofek Lavian left his role as Instacart’s head of payments to join Forage. Today, he serves as the startup’s CEO.

FIS has launched Worldpay for Platforms, an embedded finance solution aimed at SMBs. Businesses that use the offering, FIS told me via email, “eliminate the need for SMBs to pay separate partners to help with card issuance, cash advances or faster access to cash flow.” Obviously, this has implications for companies such as Stripe or Plaid, or other embeddable products that target the small business marketplace.

ICYMI: Revolut recently announced a new online checkout feature, Revolut Pay, that “lets consumers pay at an online checkout with just one click.”

Seen on TechCrunch

For LatAm payment orchestration startups, market fragmentation is a blessing in disguise 

Linus Foundation announces the OpenWallet Foundation to develop the interoperable digital wallets

YC Batch shows founders remain optimistic about fintech

Image Credits: Forage/Kristina Herrmann, Chief Business Officer

Fundings and M&A

Seen on TechCrunch

Ratio bags $411M in equity, credit for flexible subscription payment models

Kenya’s insurtech Turaco maintains 1 billion user target as it raises $10M in funding

Denim, a fintech platform for freight brokers, raises $126M in equity and debt

Allocations just got valued at $150M to help private equity funds lure smaller investors

Payall lands $10M in a16z-led seed round to help banks facilitate more cross-border payments

Lease-to-own fintech startup Kafene raises $18M to battle BNPL

Southeast Asian fintech Fazz raises $100M Series C to serve businesses of all sizes

Nigerian financial management app for merchants Kippa bags $8.4M in new funding

Fintech startup Power flexes its credit card muscle following $316M equity, debt injection

Indian fintech Cred to invest in lending partner Liquiloans

And elsewhere

Alternative asset management platform Ethic bags $50M

Composer raises $6M for automated investing platform

Redfin CEO, DoorDash co-founder invest in new startup, Far Homes, which is building a portal for Mexico real estate

German software firm Candis raises $16M to expand AP automation

Splitit drives installments-as-a-service growth with a $10.5M funding

PortX launched as new entity by ModusBox and secures $10M in new funding 

JPMorgan Chase acquires payments fintech Renovite to help it battle Stripe and Block

Whew. That was a lot, and if this week was any indication, the fourth quarter is going to be crazy. I’m heading out now in an attempt to refresh this weekend. Hope you’re doing the same! See you next week! xoxoxo Mary Ann

In case you have been hiding under a rock and haven’t heard, TechCrunch Disrupt is coming to San Francisco October 18–20! I would absolutely love to see you there. Use the code INTERCHANGE to get 15% off passes (excluding online and expo), or simply click here.


Varo’s bank charter milestone, more corporate cards and BNPL under a microscope by Mary Ann Azevedo originally published on TechCrunch

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Biden’s Secret Promise To OPEC Backfires: Shellenberger

Biden’s Secret Promise To OPEC Backfires: Shellenberger

Submitted by Michael Shellenberger,

In early September, United States Secretary of…



Biden's Secret Promise To OPEC Backfires: Shellenberger

Submitted by Michael Shellenberger,

In early September, United States Secretary of Energy, Jennifer Granholm, told Reuters that President Joe Biden was considering extending the release of oil from America’s emergency stockpiles, the Strategic Petroleum Reserve (SPR), through October, and thus beyond the date when the program had been set to end. But then, a few hours later, an official with the Department of Energy called Reuters and contradicted Granholm, saying that the White House was not, in fact, considering more SPR releases. Five days later, the White House said it was considering refilling the SPR, thereby proposing to do the exact opposite of what Granholm had proposed.

The hand of Russia's President Vladimir Putin (right) is now strengthened within the OPEC+ cartel controlled by Saudi Arabia's Crown Prince Mohammed bin Salman (left), which today decided to cut production by 2 million barrels.

The confusion around the Biden administration’s petroleum policy was cleared up yesterday after a senior official revealed that the White House had made a secret offer to buy up to 200 million barrels of OPEC+ oil to replenish the SPR in exchange for OPEC+ not cutting oil production. The official said the White House wanted to reassure OPEC+ that the US “won’t leave them hanging dry.” The fact that this offer was made through the White House, not the Department of Energy, may explain why a representative of the Department called Reuters to take back the remarks of Granholm, who has shown herself to be out-of-the-loop, and at a loss for words, relating to key administration decisions relating to oil and gas production.

The revelation poses political risks for Democrats who, in the spring of 2020, killed a proposal by President Donald Trump to replenish the SPR with oil from American producers, not OPEC+ ones, and at a price of $24 a barrel, not the $80 a barrel that the Biden White House promised to OPEC+. At the time, Trump was seeking to stabilize the American oil industry after the Covid-19 pandemic massively reduced oil demand. Trump and Congressional Republicans proposed spending $3 billion to fill the SPR. Senate Democratic Leader Chuck Schumer successfully defeated the proposal, and later bragged that his party had blocked a “bailout for big oil.”

Even normally strong boosters of the Biden White House viewed the Democrats’ opposition to refilling the SPR as a major blunder. “That decision,” noted Bloomberg, “effectively cost the US billions in potential profits and meant Biden had tens of millions of fewer barrels at his disposal with which to counter price surges.” Moreover, observed Bloomberg, it will take significantly more oil today to fill the SPR than it would have two years ago. In spring 2020, the SPR contained 634 million barrels out of a capacity of 727 million. Now, the reserve is below 442 million barrels, its lowest level in 38 years.

The decision looks even worse in light of the decision by OPEC+ today to cut production, which will increase oil prices. The Biden administration in recent days has been pulling out the stops trying to persuade Saudi Arabia and other OPEC+ members, a group that includes Russia, to maintain today’s levels of oil production. Last Friday, the Biden administration sought a 45-day delay in a civil court proceeding over whether Saudi Arabia’s Crown Prince Mohammed bin Salman should have sovereign immunity for the murder of Washington Post columnist Jamal Khashoggi, for which bin Salman has taken responsibility.

The behavior by the Biden White House displays a willingness to sacrifice America’s commitment to human rights for the president’s short-term political needs. Instead of pleading with OPEC+ to maintain or increase high levels of oil production, the Biden administration could have simply allowed for expanded domestic oil production. Instead, Biden has issued fewer leases for on-shore and off-shore oil production than any president since World War II. As such, the pleadings by Biden and administration officials have backfired. The perception of the U.S. in the minds of OPEC+ members has weakened while the influence of Russian President Vladimir Putin has strengthened.

Why is that? Why did the Biden administration decide to spend so much political capital trying, and failing, to get Saudi Arabia and other OPEC+ members to expand production when it could have simply expanded oil production domestically? What, exactly, is going on?

President Joe Biden greets the Saudi Crown Prince on July 15, 2022.

Substack subscribers can click here to

Tyler Durden Thu, 10/06/2022 - 22:20

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What Really Divides America

What Really Divides America

Authored by Joel Kotkin via,

The Midterms aren’t a battle between good and evil…

Reading the…



What Really Divides America

Authored by Joel Kotkin via,

The Midterms aren't a battle between good and evil...

Reading the mainstream media, one would be forgiven for believing that the upcoming midterms are part of a Manichaean struggle for the soul of democracy, pitting righteous progressives against the authoritarian “ultra-MAGA” hordes. The truth is nothing of the sort. Even today, the vast majority of Americans are moderate and pragmatic, with fewer than 20% combined for those identifying as either “very conservative” or “very liberal”. The apocalyptic ideological struggle envisioned by the country’s elites has little to do with how most Americans actually live and think. For most people, it is not ideology but the powerful forces of class, race, and geography that determine their political allegiances — and how they will vote come November.

Of course, it is the business of both party elites — and their media allies — to make the country seem more divided than it is. To avoid talking about the lousy economy, Democrats have sought to make the election about abortion and the alleged “threat to democracy” posed by “extremist” Republicans. But recent polls suggest that voters are still more concerned with economic issues than abortion. The warnings about extremism, meanwhile, are tough to take seriously, given that Democrats spent some $53 million to boost far-Right candidates in Republican primaries.

Republicans are contributing to the problem in their own way, too. Rather than offering any substantive governing vision of their own, they assume that voters will be repelled by unpopular progressive policies such as defunding the police, encouraging nearly unlimited illegal immigration, and promoting sexual and gender “fluidity” to schoolchildren. They ignore, of course, the fact that their own embrace of fundamentalist morality on abortion is also widely rejected by the populace. And even Right-leaning voters may doubt the sanity of some of the GOP’s eccentric candidates this November.

In short, both major parties stoke polarisation, the primary beneficiaries of which are those parties’ own political machines. But most Americans broadly want the same things: safety, economic security, a post-pandemic return to normalcy, and an end to dependence on China. Their divisions are based not so much on ideology but on the real circumstances of their everyday life.

The most critical, yet least appreciated, of these circumstances is class. America has long been celebrated as the “land of opportunity”, yet for working and middle-class people in particular, opportunity is increasingly to come by. With inflation elevated and a recession seemingly on the horizon, pocketbook issues are likely to become even more important in the coming months. According to a NBC News poll, for instance, nearly two-thirds of Americans say their pay check is falling behind the cost of living, and the Republicans hold a 19-point advantage over the Democrats on the economy.

A downturn could also benefit the Left eventually. As the American Prospect points out, proletarianised members of the middle class are increasingly shopping at the dollar stores that formerly served working and welfare populations. Labour, a critical component of the Democratic coalition, could be on the verge of a generational surge, with unionisation spreading to fast food retailers, Amazon warehouses, and Starbucks.

To take advantage of a resurgent labour movement, however, Democrats will have to move away from what Democratic strategist James Carville scathingly calls  “faculty lounge politics”: namely, their obsession with gender, race, and especially climate. For instance, by demanding “net zero” emissions on a tight deadline, without developing the natural gas and nuclear production needed to meet the country’s energy needs, progressives run the risk of inadvertently undermining the American economy. Ill-advised green policies will be particularly devastating for the once heavily Democratic workers involved in material production sectors like energy, agriculture, manufacturing, warehousing, and logistics.

To win in the coming election and beyond, Democrats need to focus instead on basic economic concerns such as higher wages, affordable housing, and improved education. They also need to address the roughly half of all small businesses reporting that inflation could force them into bankruptcy. Some progressives believe that climate change will doom the Republicans, but this is wishful thinking. According to Gallup, barely 3% of voters name environmental issues as their top concern.

Racial divides are also important — though not in the way that media hysterics about “white supremacy” would lead you to believe. Florida Governor Ron DeSantis’s decision to fly undocumented immigrants to Martha’s Vineyard was undoubtedly a political stunt, and one arguably in poor taste. But it succeeded in its main goal: highlighting the enormous divide between the border states affected by illegal immigration and the bastions of white progressivism who tend to favour it.

Under Biden, the Democrats have essentially embraced “open borders” — illegal crossings are at record levels, and few of the migrants who make it across the border are ever required to leave. This policy reflects a deep-seated belief among elite Democrats that a more diverse, less white population works to their political favour. Whether they are right to think so, however, is far from clear. Black people still overwhelmingly back the Democrats, but Asians (the fastest-growing minority) and Latinos (the largest) are more evenly divided, and have been drifting toward the Republicans in recent years.

Here, too, class is a key factor. Many middle and upper-class minorities are on board with the Democrats’ anti-racist agenda. But many working-class Hispanics and Asians have more basic concerns. After all,  notes former Democratic Strategist Ruy Teixiera, these are the people most affected by inflation, rising crime, poor schools, and threats to their livelihoods posed by draconian green policies.

Culture too plays a role. Immigrants, according to one recent survey, are twice as conservative in their social views than the general public and much more so than second generation populations of their own ethnicity. Like most Americans, they largely reject the identity politics central to the current Democratic belief system. Immigrants and other minorities also tend to be both more religious than whites; new sex education standards have provoked opposition from the Latino, Asian, African American and Muslim communities.

The final dividing line is geography, always a critical factor in American politics. For decades, the country seemed to become dominated by the great metropolitan areas of the coasts, with their tech and finance-led economies. But even before the pandemic, the coastal centres were losing their demographic and economic momentum and seeing their political influence fade. In 1960, for example, New York boasted more electoral votes than Texas and Florida combined. Today, both have more electoral votes than the Empire State. Last year, New York, California, and Illinois lost more people to outmigration than any other states. The greatest gains were in Florida, Texas, Arizona, and North Carolina. These states are high-growth, fertile, and lean toward the GOP.Likewise, regional trends suggest that elections will be decided in lower density areas; suburbs alone are  home to at least 40% of all House seats. Some of these voters may be refugees from blue areas who still favour the Democrats. But lower-density areas, which also tend to have the highest fertility rates, tend to be dominated by family concerns like inflation, public education and safety, issues that for now favour Republicans.

Put the battle between Good and Evil to one side. It is these three factors — class, race, geography — that will shape the outcome of the midterms, whatever the media says. The endless kabuki theatre pitting Trump and his minions against Democrats may delight and enrage America’s elites — but for the American people, it is still material concerns that matter.

Tyler Durden Thu, 10/06/2022 - 21:40

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Switzerland, Not USA, Is The ‘Most Innovative’ Country In The World

Switzerland, Not USA, Is The ‘Most Innovative’ Country In The World

The World Intellectual Property Organization (WIPO) has released its 2022…



Switzerland, Not USA, Is The 'Most Innovative' Country In The World

The World Intellectual Property Organization (WIPO) has released its 2022 Global Innovation Index. It evaluated innovation levels across 132 economies focusing on a long list of criteria such as human capital, institutions, technology and creative output as well as market and business sophistication, among others.

The 2022 index has found that innovation is still blossoming in some sectors despite the global economic slowdown and coronavirus pandemic, especially in industries to do with public health and the environment.

As Statista's Katharina Buchholz reports, Switzerland topped the rankings with a score of 64.6 out of 100, the 12th time it has been named the world leader in innovation. The United States come second while the Sweden rounds off the top three.

You will find more infographics at Statista

One of the biggest winners of the ranking was South Korea, which climbed up from rank 10 in 2020 to rank 6 in 2022.

China is now the world's 11th most innovative nation, up from rank 14 in 2020 and 2019 and rank 17 in 2018.

China was also named the most innovative upper middle-income country ahead of Bulgaria (overall rank 35), while India (overall rank 40) came first for lower middle-income countries, followed by Vietnam (overall rank 48).

Notably, China is now on a par with the United States in terms of the number of top 100 Science & Technology clusters

Finally, WIPO notes that on the one hand, science and innovation investments continued to surge in 2021, performing strongly even at the height of a once in a century pandemic. On the other hand, even as the pandemic recedes, storm clouds remain overhead, with increasing supply-chain, energy, trade and geopolitical stresses.

Tyler Durden Thu, 10/06/2022 - 20:40

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