Hello and welcome to your one-stop snapshot of the top stories across Europe’s fintech and payments industry. Our round-up takes on a distinctively Nordic flavour today, with news that one of the region’s most successful financial technology exports, Tradeshift, has just reeled in $75m of fresh funding. Meanwhile Pleo, a corporate payments startup founded by two of its former employees, is launching its beta pilot. Elsewhere Stockholm’s iZettle has just taken another step away from its core mobile payments business with new feature form merchants.
1. Copenhagen-founded Tradeshift lands $75m
B2B payments firm Tradeshift (now headquartered in Silicon Valley) has just scooped up $75m in funding, pointing to the growing momentum behind corporate payments technologies. The firm’s Series D funding comes from Data Collective, HSBC, American Express Ventures, Notion Capital, CreditEase Fintech Investment Fund and Pavilion Capital. The firm connects buyers and suppliers, helping to manage the process of buying, paying and doing business globally.
The firm says it saw 250% growth in transaction volumes between 2014 and 2015, serving more than 800,000 users. Tradeshift claims it is processing “billions” of dollars per month in supply chain transactions in more than 190 countries.
— Stephen Chandler (@SC_Chandler) June 9, 2016
2. Smart corporate card startup Pleo launches beta
And while we’re on the topic of Tradeshift, a startup founded by two of its former employees, including its former CFO Jeppe Rindom, are launching their beta pilot in Denmark and the UK today. We’re talking about Pleo of course, which wants to overhaul company card culture. The firm wants to simplify the management of payments with smart cards for employees and automating the time consuming and costly process of expense reporting. It says it uses uses machine learning to automatically categorise purchases and add more detail to expense reporting, as well as to monitor unusual spending behaviour.
“Categorisations are more complicated than you think,” says Rindom. “In many cases, we can guess it by knowing the merchant category, but not always. A $150 transaction from a hotel can be a hotel room categorised as ‘travel’ but it could also be a dinner you had with two colleagues, which should be labelled ‘Meals’. In those situations, we use machine learning. A lot of different parameters goes into the equation such as ‘time of the day’, ‘amount’, ‘calendar information’, ‘previous behavior of the user’ etc.”
The firm says it already has more than 500 companies signed up for early access with 10,000 employees between them.
Read our interview with CEO Jeppe Rindom
3. Bonjour France! Stripe launches in France
Meanwhile, over in France, Silicon Valley’s Stripe is out of beta and open for business. The service, which lets businesses accept payments online and on mobile says it’s been testing in the country for more than a year. It says “thousands” of businesses are now on the platform including wearable tech firm Withings and video sharing site Dailymotion. Stripe has installed a local team in its Paris office.
Stripe does not release hard numbers, but says it is currently processing “billions” of dollars for merchants globally. Five years old, the company has raised around $300m in funding to date and its investors include Sequoia Capital, Visa and American Express plus PayPal co-founders Peter Thiel, and Elon Musk. [Read More]
Check out our Q&A with Stripe’s UK head
4. UK big banks join up to Vocalink’s ‘pay by bank’ service
Vocalink says UK big banks Lloyds, Halifax and Bank of Scotland have signed up to launch Pay by Bank app mobile payments to their customers via its Zapp service. They join Barclays, which is set to launch the service this Autumn to its customers. The service which has been delayed on launch lets customers pay for goods on a retailers site by linking directly to their banking app. If they hit the ‘pay by bank’ option on a participating retail site they are taken to a screen where they can first enter an access code, then see their bank balance and then authorise the payment without having to enter their credit card or bank account details.
Vocalink parent is expected to be bought by MasterCard in the not too distant future. Vocalink is currently owned by a group of banks including the UK “big four” (Barclays, RBS, Lloyds and HSBC) as well as Santander. The consortium was told by the Payment Systems Regulator (PSR) in February to sell their stakes to boost competition and drive a more open payments industry.
5. iZettle predicts €3bn mobile payment transactions in 2016
Now five years old, Stockholm’s iZettle is taking another step beyond its core mobile payments business. It’s launching a new tool to help small and medium-shaped businesses talk to their customers as part of the firm’s longer term plan to take the company beyond payments. Meanwhile iZettle also says it is forecasting €3bn in transaction volume for 2016, which CEO and co-founder Jacob de Geer tells us is “in line” with expectations. iZettle is also cutting mobile payment fees for merchants to 1% (down from 1.5%) to undercut rivals on the market and cater to bigger ticket customers.[Read the full story]
— iZettle (@iZettle) June 8, 2016
6. Final call for Capital One’s Nottingham fintech accelerator
There’s good news for UK fintech startups not based in London with applications for a spot in Capital One’s Nottingham fintech accelerator open until Sunday this week. Capital One Growth Labs, based in the credit card firm’s Nottingham headquarters, is looking for startup and high-growth companies sitting in the following categories: Unstructured data insight; Security and fraud prevention; Money management tools; Enabling healthy financial habits and Agent technologies. There’s also an ‘open’ category for companies with ideas outside those specialties.
From the long list, 25 will be selected to pitch on July 6th and up to six will then be taken onto the ten-week programme.
Eastern Europe is still very much a region finding its identity following the breakdown of the Soviet Union over 20 years ago. Countries in the region are at various stages of economic growth and payments infrastructure development, and the e-commerce landscape looks different as you cross borders.
The failure to keep pace with expanding compliance procedures has seen a rise in the number of financial penalties issued by regulators over the past few years. As anti-money laundering (AML), know-your-customer (KYC), counter-terrorism financing and other compliance obligations expand across different territories, organisations large and small have struggled to maintain adequate and comprehensive safeguards – often resulting in sizable fines and significant reputational damage.
Andrew Quartermain, VP Sales at ACI Worldwide, explains that the growth of e-commerce and the rapid rise in the popularity of smartphones has played a big part in driving retail change, with today’s consumer now able to browse, compare, buy, receive and review products at their convenience, wherever they are. Highly connected consumers are demanding a more personalized and seamless shopping experience, wherever and however they choose to shop - and retailers have had to undertake a shift from paper to digital technologies to keep up with this demand.
The Global Business and Spending Outlook looks positive for the B2B payments industry.