News Briefing - Crowdfunding, SME And Alternative Finance

Income Tax square on Monopoly board, with dice. Picture by Alan Cleaver.

1. UK – FinTech 

Finextra reports: 

“Lloyds Banking Group customers will be able to set their own limits when the new £100 ceiling on contactless card payments comes into effect next month. 

The upcoming hike in the contactless spending limit on consumer debit cards has raised fears that they could become a target for fraudsters, who can escape unchecked for at least five transactions when tapping to pay at high street retailers.

Lloyds says it is responding to customer concerns by introducing new card controls in its mobile app, which will enable users to move the limits in £5 increments of between £30 and £95. Customers will also be given the option to switch off contactless functionality all together, opting for PIN entry at the checkout instead.” 



2. US – FinTech 


Crowdfundinsider on an expanding litigation-finance market: 


“While the baseline premise behind Liti Capital is interesting enough on its own, the founding team’s vision for the company and the cryptocurrency industry as a whole suggests it is well-positioned to be around for the long haul. 

Executive chairman and CIO David Kay previously founded a New York City-based private equity firm that financed litigations and grew into a $1 billion-plus fund that backed complex litigations and arbitrations around the world. He knew Liti co-founder and CEO Jonas Rey, the head director of Athena Intelligence, a private intelligence firm in Geneva and Shanghai that helps recover assets. Kay knows the world of litigation finance, while Rey knows how to locate the assets, so their skills complement each other perfectly. 

Litigation finance is an increasingly popular method of funding larger legal cases. Many deserving cases never see a court because the plaintiffs cannot provide the size of retainer needed for the lawyers to get involved. Take pieces of crowdfunding and combine them with cryptocurrency and you have something. 

That’s what Liti Capital does. Each LITI token represents a share of stock in Liti Capital SA, which then vets and invests in select cases they believe have a high chance of producing a successful outcome. Previously such lucrative opportunities were only available to the connected and wealthy and that did not sit well with Mr. Kay. Why should wealth be the sole determining factor in who has access to such opportunities? While Mr. Kay admitted he is fortunate enough to have that access, the rest of his family did not. Plenty of smart people who understand the risk and have a bit of money to invest should be allowed the opportunity as much as someone without that awareness but who qualifies for access solely based on the size of their bank account. 

Mr. Kay described a judgment or award as the single most expensive piece of paper most people ever buy. Winning is one thing but collecting on it is another. When deciding on which cases to back, factors Liti Capital considers include the jurisdiction the case is being heard in, who is deciding the case, and the type of case it is. Is it a longer litigation or a shorter arbitration hearing? Who are the plaintiffs? What documentation do they have? Who are the defendants? Where are they based? How easy will it be to collect from them? Vetting is 70 per cent science and 30 per cent art, and it is usually easier to collect for money owed than prove damages done.” 


3. International – FinTech 


Finextra reports: 

The biggest study of mobile wallets in the world, released by payments fintech Boku, with data from Juniper Research, reveals that Europe will be home to four of the ten fastest-growing countries for mobile payment transactions by 2025. Russia, Germany, Portugal, and Sweden are projected to grow the fastest in Europe, comprising four of the ten fastest globally, with France, Norway, Spain, Denmark, Netherlands, and the UK, being the other European nations helping make up the top 20. 

Despite this growth in mobile transactions, Europe lags behind emerging markets when it comes to mobile wallets. Africa and The Middle East and Latin America are the two markets set to grow most significantly by 2025 with seven of the top 10 fastest growing countries for mobile wallet purchases hailing from these regions. When it comes to specific wallets, it’s those based in emerging markets where the growth is set to happen. By 2025 SadaPay (Pakistan), MercadoPay (Brazil) and PicPay (Brazil) are predicted to be the fastest growing mobile wallets. 

Boku’s report also reveals that one in two people globally will use a mobile wallet by 2025. The growth of mobile wallets is down to factors such as: 

  • Displacement: Mobile wallets are displacing cash, bank transfers and card transactions as commerce shifts further online and consumers seek more convenient and secure payment methods. 
  • Ease of access: Many consumers in emerging markets, particularly younger ones, are opting for mobile wallets, that enable them store value and transact digitally, instead of traditional bank accounts. 
  • Super-apps: Outside of North America and Europe, mobile wallets offer greater utility – from ticketing to delivery services. They are increasingly “essential” for digital commerce with growth commensurate. 


4. International - FinTech

Altfi reports: 

“Listed Australian buy now, pay later provider Zip has agreed a $50m strategic investment in Indian BNPL firm ZestMoney, in a move designed to expose Zip to the Indian market. 

Zip said its investment was part of its plan to build a global BNPL business, with India as a key market where ZestMoney already has over 11m registered users and over 10,000 online merchants. 

“While Buy Now, Pay Later is emerging as a preferred mode of payment globally, in India it also plays a crucial role in driving access to credit,” said Zip’s CEO and co-founder Larry Diamond. 

“With more people using digital payments and online shopping, ZestMoney can positively impact hundreds of millions of lives in the coming years.” 

Zip is Australia’s second-largest buy now, pay later provider after AfterPay—which Square is in the process of acquiring—and operates in 11 other markets including Canada, the UK and the US.” 


5. International – FinTech 

Finextra reports: 

“The central bank of Bhutan is to use Ripple's CBDC Private Ledger to pilot a central bank digital currency. 

Building atop its current payments infrastructure, the Royal Monetary Authority will pilot retail, cross-border and wholesale payment use cases for a digital Ngultrum in phases using Ripple’s blockchain technology.

“Our collaboration with Ripple is testament to the potential of CBDCs to provide an alternative and sustainable digital payment instrument in Bhutan,” says Yangchen Tshogyel, deputy governor of the Royal Monetary Authority of Bhutan. “Ripple’s groundbreaking technology will allow for the experimentation of a CBDC with our existing payments infrastructure—while ensuring efficient and cost-effective cross-border transfers.”

The latest initiative follows the 2019 launch of Bhutan's Global Interchange for Financial Transactions (Gift) system which enables electronic transfer of large value and bulk payments.”