Hello TWIF UK & Europe friends,

This Week in Fintech aims to be the front page of global fintech and over the past six months, it has expanded its coverage with newsletters for Latam and Asia as well as this UK & Europe edition.

In order to become a true front page of fintech, we are streamlining our newsletters under one Substack URL, with each regional now its own dedicated section. Since you have already been subscribed, you will have to click here and select “UK & Europe” as the region to receive fintech news and updates from UK & Europe from next week. You can also select from our Asia, or LatAm or Global editions. Apologies for any inconvenience caused and thanks for your continued support.

Please find another week of fintech news, financings and exits below.

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Tweet of the week 🦉🏆

Jason Mikula @mikulaja

Challenger banking's dirty little secret: its fraud problem. Products like Chime, Cash App, and PayPal make signing up easy -- making them easier for criminals to exploit as well. via @JeffKauflin & @ElizaHaverstock:

Fintech’s Fraud Problem: Why Some Merchants Are Shunning Digital Bank CardsDuring the pandemic, startups like Chime have posted astounding growth in users and valuations. So why are some car rental companies, hotels and other big vendors wary?forbes.com

fintechjunkie.eth @fintechjunkie

After years of sitting on the sidelines, I finally decided to take the red pill. “Week 2” put me on the steepest part of any learning curve I’ve experienced in decades. Here are a few of my simplified observations, early conclusions and emerging frameworks:

John Street Capital @JohnStCapital

0/ Last month JPM published a piece on payments entitled "Payments are eating the world" introducing their "POWER+" framework. These 5 themes (& 20 micro themes) are responsible for ~$54T of the ~$240T in global payment flows: Platforms Online Wallets Embedded Real Time

💼 Open Role Spotlight

LiFE Ventures is working with a team of seasoned, successful entrepreneurs who are looking for a co-founder to lead a new and well-funded fintech that is currently in stealth and is looking to rapidly scale. The business is looking to lead the B2C retail e-commerce market within payments, before launching into new sectors and markets. If you are based in Europe, have entrepreneurial or high-level management experience and are looking to lead an innovative start-up please send your CV to Paul Kvadsheim

Funding 💸

There were 10 deals in the fintech space across the UK and Europe since the last post, with a total investment of $287m. Some highlights are below.

🇪🇺 Avalanche crypto economy accelerator Colony raised a $18.5m seed fund led by AVA Labs.

🇬🇧 Core banking provider Thought Machine raised a $200m Series C, at a $1bn valuation, led by Nyca Partners.

🇬🇧 Money management app Plum raised a $24m Series A led by dmg ventures and Ventura Capital.

Challenger Banking 🚀

🇬🇧 According to App Radar, Revolut bucked the trend of app neobanks experiencing slower downloads and posted growth of 38% this year.

🇬🇧 SME focused neobank Redwood has become profitable, 4 years after launching, and has lent more than £400m to SMEs.

🇬🇧 Wise announced slightly lower profits for H1 2021 due to its increase in headcount and costs associated with its IPO. It is also setting up an office in Austin and adding 150 people to its North America team.

Digital Assets ₿

🇬🇧 Crypto exchanges operating in the UK will have to pay the 2% digital services tax as they do not qualify for an exemption because HMRC doesn’t recognise digital assets as financial instruments.

🇬🇧 The Royal United Services Institute (RUSI) have published a report highlighting the money laundering risks in the NFT market.

🇬🇧 Binance is working to build its UK business back up after regulators halted its operations its CEO told the Sunday Telegraph.

🌍 Square has changed its name to Block to help rebrand the different units from the corporate entity. The Square, Cash App, Tidal and TBD54566975 are keeping their brands with Square Crypto being renamed to Spiral.

Traditional Banking 🏦

🇪🇺 Bank of Ireland has been fined €24.5m over its IT deficiencies.

🇬🇧 AJ Bell has launched Dodl, a commission-free investing platform which has an annual charge of 0.15% and a monthly fee of £1.

🇬🇧 TSB is closing another 70 branches.

🇬🇧 HSBC is adding investing to its mobile app with a minimum monthly investment of £50.

🇬🇧 Asset manager abrdn has bought share trading platform Interactive Investors for £1.5bn.

Fintech Infrastructure 🚧

🇬🇧 The Bank of London, the UK’s second new clearing bank in 250 years, is set to launch and has raised at a valuation of more than $1bn.

🇬🇧 Crowdfunding platform Seedrs has been bought by Republic for $100m after its merger with rival Crowdcube was blocked.

🇬🇧 Cash machine operator Link is rolling out “Cashback Without Purchase”, a scheme to allow consumers to withdraw up to £50 at small high street retailers.

🇬🇧 Funding Circle has created a single API for third party firms to offer loans up to £500k to SMBs on their own website, as it moves into the embedded finance space.

🇬🇧 Carbon removal marketplace Patch is expanding to Europe and opening up an office in London, supporting new languages and currency options as it seeks to continue to move the needle on carbon removal.

🌍 Goldman Sachs is creating GS Financial Cloud for Data with Amazon Web Services, a platform for data resources and analytics for its hedge fund and asset management clients.

Payments 💰

🇪🇺 A summit of the 32 banks involved in the European Payments Initiative failed to reach a decision on funding commitments.

🇪🇺 Mollie reported a 51% increase in BNPL usage across Europe during Black Friday compared to last year. PayPal reported 400% increases and Barclays research found that many don’t understand how the product works.

🌍 Meta’s chief of its fintech unit David Marcus has quit. Facebook Messenger is testing Split Payments functionality within a group chat.

🌍 Microsoft are embedding BNPL into its Edge browser through a partnership with Zip.

Regulatory Corner 🔎

In collaboration with Kat Cloud

🇪🇺 Commission fines banking giants over FX price fixing - The European Commission has completed its investigation into the Foreign Exchange sector. Their investigation found that UBS, Barclays, HSBC, Credit Suisse and RBS colluded in setting similar trading strategies. This investigation reminds all that the Commission is still focused on ensuring the soundness of the financial services industry.

🇬🇧 The FCA are doubling its member fees to £2,200 as it seeks to invest in its ability to supervise over 51,000 firms in the UK.

🇬🇧 FCA scraps 90-day rule - The Financial Conduct Authority has taken the decision to remove the requirement for consumers to re-authenticate with their bank every 90-days. Instead, Third Party Providers are now responsible for collecting consumers' re-confirmation.

🇬🇧 PSR sets out strategy for CoP - The Payment Systems Regulator has outlined the remaining implementation stages of Confirmation of Payee. Specifically, they have called for Pay.UK and the Open Banking Implementation Entity to stop all activities supporting CoP by April 2022 as the remaining PSPs take on CoP directions.

🌍 International

Don’t forget to subscribe to TWIF US & Global by Nik Milanovic, TWIF India & SEA by Osborne Saldanha and TWIF Latam by Christine Chang.

Longer reads 📜

A2A, Fed Now and Real Time – Threat to V/MA? Nope - Tom Noyes
Account-to-Account payments - Dave Birch
FedNow - Tom Noyes
How Crypto Vigilantes Are Hunting Scams in a $100 Billion Market - Bloomberg
Buy Now, Pay Later, Consumer Preference and Collections Outlook - TrueAccord
Open banking is having a future identity crisis - Paul Loberman
Core vendors seek to eliminate barriers in bank-fintech partnerships - American Banker
The fraud supply chain - Patrick McKenzie

Want to be a This Week in Fintech - UK & Europe sponsor? Reach out to me at michael@thisweekinfintech.com or find me on Twitter.

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This Week in Fintech

This Week in Fintech UK & Europe (06/12)