Google and Revolut win licenses while Square keeps trying, Facebook makes crypto move

By December 28, 2018Industry

To roundup a very exciting month in fintech and payments, we have selected the most representative and recent industry announcements, which set the tone for an even more interesting year to come. Here they are.

Google gets e-money license in EU

The license, granted by the Lithuanian central bank, will enable Google to process payments, issue e-money and handle electronic money wallets. For now, Google provides limited financial services via Google Pay, which enables customers to store their card details to make payments in-store, online or in-app.

In 2016, Facebook won its permit in Ireland, while Amazon Payments Europe already has a license in Luxembourg.

In other news, Google has made a shopping feature available in India, based on a marketplace model. Via the Shopping tab, customers can browse through offers, review prices from various retailers and discover products.

Revolut wins European banking license

UK-based Revolut, one of the fastest-growing smartphone-based banking services, has got its European banking license – also from the Bank of Lithuania – and will start accepting deposits.

As Bloomberg reports, “by issuing e-money licenses in three months, Lithuania is positioning itself as one of the fastest licensing jurisdictions in the EU. The Baltic nation has granted a total of 39 e-money licenses, second in the EU only to the UK with 128 licenses”. And since we’re talking numbers, in total, 37 UK-based financial institutions have already applied to the European Central Bank for new licences, or to extend existing ones. No wonder why Square is not ready to give up on its banking license yet, as most recently, the company has refiled its application, but with US regulators.

Getting back to Google and Revolut: while Lithuania seems to be the regulatory hero of the month, industry voices have already started debating the companies’ choice (over the Central Bank of England, for example). Here is an interesting view on the matter: Is Lithuania another Iceland banking crisis in the making?

2018 fintech acquisitions at a glance

While the much-debated collaboration/ competition between banks and fintechs still makes the headlines, recent statistics published by indicate that, actually, in 2018, of all 21 acquisition agreements, “we saw 10 banks acquiring 13 FinTechs; 2 asset management companies acquiring 2 FinTech; and 5 insurance companies acquiring 5 FinTechs”.

Goldman Sachs, Banco Sabadell Group and Societe Generale are among the main banking players which acquired more than two FinTech startups, the same source indicates. However, the most recent announcements in the M&A (mergers & acquisitions) space include:

  • Visa’s plans to acquire London-listed Earthport in a GBP 198 million deal
  • Ant Financial’s plans to buy UK fintech company World First

Facebook, WhatsApp and crypto

Facebook`s latest plans include developing a cryptocurrency that would enable users to make money transfers on its WhatsApp messaging app.

The initiative has as a main focus the remittances market in India and for now, Facebook is “far from releasing the coin, because it’s still working on the strategy”, as Bloomberg reports, citing sources familiar with the matter.

The cash vs. cashless debate (again)

While London prepares to finally get its first Amazon Go store soon, much to the delight of those in favour of cashless experiences, the debate over the use of cash in the UK seems to get fiercer than ever.

More specifically, a recent report from the Access to Cash Review, titled ‘Is Britain ready to go cashless?’ unveils that almost 8 million people (17%) claim that cash still represents an economic necessity, in spite of the increasing use of cards and electronic payments.

“If we go cashless too quickly, exclusion risks include: threats to rural communities; social isolation; a rise in debt; financial exploitation; and stigma towards those who rely on cash”, according to the research.

Notably, nowadays people only use cash for three in every ten transactions, down from six in ten almost a decade ago.

Statistics of the week

Companies in the travel sector risk losing one third of their customers due to lack of payment methods available at checkout. Source: an online survey of 7,400 consumers by YouGov and ACI Worldwide.

Last but not least, we would like to extend our warmest Season’s Greetings to all of our readers and social media followers. Stay tuned for all the valuable industry developments that 2019 has in store, enjoy the present and focus on a better tomorrow.