Adyen gets UK banking license
Adyen gets UK banking license
Adyen gets a UK banking license, Affirm partners with Booking.com, and Coinbase ventures into lending
Hi!
At the beginning of my journey in financial services, I heard a phrase: “Every bank wants to be a Fintech company, and every Fintech company wants to be a bank.” A decade later, LendingClub and SoFi are banks. Block, the parent of Square and Cash App, holds an industrial banking charter. Adyen had banking charters in the US and Europe and just got one in the UK. So who’s next? Robinhood? Affirm? Coinbase? Something to think about. In the meantime, let’s wrap up this week with the latest news:
Adyen gets a UK banking license,
Affirm partners with Booking.com, and
Coinbase ventures into lending
Thank you for reading and have a great weekend!
Jevgenijs
p.s. have feedback? DM me on Twitter
Adyen Gets UK Banking License
Adyen (AMS: ADYEN) has been granted a permanent UK banking license, replacing its temporary post-Brexit permission to operate in the country. The Financial Conduct Authority's approval allows the Dutch company to continue offering payment services for its enterprise merchants in the UK. Additionally, the license enables Adyen to provide its recently launched suite of embedded financial products, catering to platform businesses and their small and medium-sized business users with services like bank accounts, virtual/physical cards, and direct cash advances. Adyen also holds European and US banking licenses.
The company made news recently after its shares lost almost half of their value following the release of the first half of 2023 financial results. The company missed analysts’ expectations due to increased hiring and intensified competition in the US from rivals like Stripe. Adyen reported a 23% YoY in processed volume to €426.0 billion and a 21% YoY growth in revenue to €739.1 million, but failed to meet analysts’ expectations on profitability, reporting €320.0 million in EBITDA. Moreover, despite the broader trend of Fintech retrenchment, Adyen continued aggressive recruitment, which resulted in an almost 15% growth in its workforce and over 80% growth in compensation costs.
✔️ Adyen granted UK banking authorization
✔️ Stripe rival Adyen secures banking license in the UK
Affirm Partners with Booking.com
Affirm (NASDAQ: AFRM) has partnered with Booking.com, one of the largest online travel platforms globally, to provide travelers with flexible payment options. The partnership allows Booking.com customers to pay at checkout in monthly or bi-weekly installments and expands on Affirm's existing collaborations with other Booking Holdings travel brands like KAYAK, Agoda, and Priceline. “Consumers are increasingly booking travel with more flexible payment options, as Affirm’s travel and ticketing purchase volume grew nearly 50% year-over-year during the [second quarter of 2023]” commented Wayne Pommen, Affirm’s Chief Revenue Officer.
In June, Affirm announced a partnership with Amazon (NASDAQ: AMZN) to provide customers and merchants with pay-over-time payment options for the company’s Amazon Pay service. Thus, under the new partnership between the two companies, eligible U.S. merchants using Amazon Pay can now integrate Affirm's Adaptive Checkout, as a payment option at checkout. This allows customers to access Affirm's pay-over-time solution, which is already used by millions of customers on Amazon.com and the Amazon mobile app. Amazon and Affirm started collaborating in 2021 and had an exclusive agreement until January 2023.
✔️ Affirm Partners With Booking.com
✔️ Booking.com Joins Affirm’s Network to Offer Installment Payments
Coinbase Ventures into Lending
Coinbase (NASDAQ: COIN) is launching a digital asset lending platform targeting large institutional investors through its Prime brokerage service. The platform allows clients to lend money, primarily in the form of crypto assets, to Coinbase and receive collateral that exceeds the loan's value, serving as a safeguard. Coinbase can then use these assets to offer secured loans to institutional trading clients, similar to traditional prime brokerage services offered by banks. This expansion into crypto lending comes after several lenders in the space faced bankruptcy, and Coinbase recorded no credit losses on loans in 2022.
In the second quarter, Coinbased reported that its losses narrowed, despite a 17% YoY decline in net revenue. Transaction revenue declined 50% YoY to $327.1 million, however, this was offset by a 28% growth in subscription and service revenue to $335.4 million. The growth in non-transaction revenue was primarily driven by interest income, while the decline in transaction revenue resulted from lower trading volumes. A narrower loss comes on the back of multiple layoffs that the company executed in 2022 and early 2023, which reduced the total operating expenses for the quarter to $781.5 million, down 58% from a year ago.
✔️ Coinbase to launch new lending platform aimed at large institutional investors
✔️ Coinbase Is Getting Into Crypto Lending. What It Means for the Stock
Visa's market cap has again crossed the $500 billion mark…which is bigger than the combined market cap of Shopify ($84.4B), Fiserv ($74.7B), PayPal ($68.9B), Block ($35.3B), Global Payments ($33.1B), FIS ($32.7B), Nubank ($32.7B), Adyen ($25.4B), Coinbase ($18.5B), XP ($14.1B), BILL ($12.4B), Toast ($11.5B), Robinhood ($9.8B), Wise ($8.3B), SoFi ($8.1B), Affirm ($6.6B), dLocal ($6.2B), Shift4 ($4.7B), Remitly ($4.5B), Flywire ($3.9B), and Stone ($3.7B). This is crazy!
VP of Engineering, Data Solution
@ Adyen
🇺🇸 Chicago, IL, United StatesVP Engineering - Machine Learning
@ Adyen
🇪🇸 Madrid, SpainProduct Manager, Capital
@ Affirm
🇵🇱 Remote, PolandMarket Expansion Lead, Americas
@ Coinbase
🇧🇷 Remote, BrazilHead, Mobile Business Development
@ Coinbase
🇬🇧 London, United Kingdom
Cover image source: Adyen
Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.