News Briefing - Crowdfunding, SME And Alternative Finance

Income Tax square on Monopoly board, with dice.

1.UK – FinTech


 Altfi reports: 

“Fintech lender Sonovate, which provides invoice financing to recruitment firms, is pivoting its business to embrace the embedded finance market.  

Sonnovate has been stealthily working on a new cloud-native, API-first lending platform, after expanding its tech team from 20 to 60 people based between its London and Cardiff offices. 

The new platform will allow it to help more enterprise-level businesses with finance on an ad hoc basis.  

Enterprise businesses are organisations that generate average annual revenues in excess of £10,000,000, many more of whom are dealing with the growing trend towards more flexible, freelance and contract work, CEO of Sonnovate Richard Prime says. 

“As the demand for flexible working increases, our customer needs have become more sophisticated. Our new platform will not only strengthen our lending service but enable us to expand into new geographies and fund more types of businesses, especially larger businesses.”  

The new invoice platform will provide instant funding decisions and credit limits, variable advance and facility management, increased automation and enhanced reporting via an API. 

The lender has seen growing business from enterprise customers which currently account for about a third of its funding, but the amount lent to them increased 144 per cent last year as the pandemic continued its march against normal labour market conditions.” 


2. UK – FinTech 

Finextra reports: 

“TrueLayer has unveiled a recurring payments api capable of dealing with both sweeping and non-sweeping use cases. 

The Competition and Markets Authority (CMA) has mandated the UK’s nine largest banks to provide VRPs that support the automatic transfer of money between two accounts belonging to the same person.

VRPs allow customers to connect authorised payments providers to their bank account so that they can make payments on the customer’s behalf within agreed parameters.

However, amid some confusion over what use cases fall within the scope of the Sweeping definition, the CMA has stressed that the practice cannot be mandated for making e-commerce purchases.

Matt Parish, product lead for VRP at TrueLayer, comments: “The mandated approach, while beneficial, only supports payments between an individual customer’s accounts, limiting the ultimate potential of VRP. We are proud to announce the industry's first recurring payments API that goes beyond that mandate to deliver comprehensive payment options that will create a better customer experience."

TrueLayer says it is collaborating with select banks around non-sweeping, offering businesses recurring payments to their customers for a range of services, including utility bills, subscriptions and other forms of digital payments. Using VRP through TrueLayer enables the amount being collected to vary without needing the account holder to re-consent every payment - for example, utility bills with a fixed payment date but different amounts due each time.” 


3. International – FinTech 

Altfi reports: 

“Spanish banking giant Santander this morning published its Q1 results for 2021, giving the clearest picture yet of its fintech payments arm PagoNxt. 

PagoNxt is a collection of B2B payment services, including merchant acquiring, international trade and consumer, supported in part by its majority stake in Ebury and formerly included PagoFX. 

According to its latest results, PagoNxt has grown by over 140 per cent in the last 12 months, with its total income during the quarter ending 31 March sitting at €162m. 

The losses attributed by Santander to this division have also been slashed by a quarter, from €72m in Q1 2021 to €54m in Q1 2022.” 


4. International – FinTech 

Finextra reports:

“Sweden's SEB has signed Humla, a fintech startup from retail congolomerate Axel Johnson, as the first customer for its banking-as-a-service platform. 

As a startup within the Axel Johnson group, Humla intends to embed financial service products within its retail brands, catering to 1.5 million customer interactions each day.

“The retail companies within Axel Johnson have a deep understanding about their customers, which combined with modern technology will be used to build innovative financial services enabling more personalized experiences and data driven offerings,” says Emil Berg Eckerrot, CEO of Humla. “SEBx provides us with a complete banking platform built on modern technology, which allows us to focus on the customer experience instead of banking regulations.”

The Swedish bank's BaaS platform has been developed by SEB's innovation unit SEBx, which runs as a standalone entity using core banking technology from Thought Machine and Google’s Infrastructure and Data Cloud technologies.” 



5. International – FinTech 


Crowdfundinsider reports: 


“As was noted last week, this past January the Securities and Exchange Commission (SEC) proposed amendments to the Exchange Act and the definition of an Exchange as well as Regulation ATS (Alternative Trading System). While described in relatively benign terms, the language of the proposed changes may impact digital asset markets – perhaps dramatically. 

CI reported on a comment letter posted by a group of very high-profile blockchain advocates aiming to preserve digital asset innovation in the US. You may read that here. 

Below are some additional comments submitted by interested parties which may be impacted by what the SEC intends to accomplish. 

Circle Internet Financial, a top stablecoin issuer that is pursuing a national bank charter, said there are “valid concerns” regarding the vague language, undefined terms and potential broad reach of the proposed rule changes: 

“As Commissioner Peirce has urged, the Commission should think through the full implications of its proposals, particularly with respect to digital asset markets, and should welcome more extensive public comment from such market participants prior to implementing new regulation in this space.”