The great battle of payment apps comes to London. Facebook paid $19 billion in 2014 to acquire WhatsApp, but the messaging service doesn't produce pots of revenue. At least it's not a big team: 400 people run WhatsApp for 1.5 billion users. Banking separates the value and the message. Bitcoin's killer concept is that the value travels with the message. Now Mark Zuckerberg is determined to make WhatsApp pay, as he told developers last week that he wanted to make sending money as easy as sending a photograph. Regulators everywhere looked up from their soup. "The app, which has 1.5bn users globally, will expand its workforce by a quarter with the hiring of about 100 people," says the FT. "Most of the software engineers will be hired in London with additional operations staff hired in Dublin. Facebook said it chose the UK, where WhatsApp is far more popular than the US, because it attracts a multicultural workforce from many of the countries where WhatsApp is widely used, such as India. New staff will build a payments function as well as products that focus on safety and spam on the app." While Messenger, Facebook and Instagram are already bursting at the seams with advertising and sponsored content, WhatsApp remains ad free and encrypted, and it's not a stretch to imagine that WhatsApp privacy and encryption might sit well with payments. But what will people send as value? Will it be a Zuckerberg Coin? And what's the alternative? In fact Zuckerberg himself acknowledged that WhatsApp's biggest competition could come from Apple's iMessage, itself a derivative of the unfashionable SMS. Apple wants you using its Apple Cash, not Zuckerberg coins!
Mexico is attracting funding and players as fintechs continue to look for new customers. One such local player is Clip, a Mexican version of Square or iZettle, which produces a card reader that functions with a smartphone to offer merchants card acceptance. Square has built a successful business by starting with the dongle model, while PayPal spent $2.2 billion last year to acquire iZettle. Softbank is among the new investors in Clip. According to Reuters, Softbank made the investment earlier this year, just ahead of the launch of a $5 billion Innovation Fund focused on Latin America. "Clip's valuation after the transaction rose to between $350 million and $400 million, the two sources said. Clip's total funding to date is roughly $160 million. Clip told Reuters SoftBank and New York investment firm General Atlantic have invested in the company, without providing details." General Atlantic is a serial investor in payments businesses.
Brazilian fintech Nubank is opening an office in Mexico with 20 employees as it begins a tentative expansion of its credit card business, according to its chief executive Cristina Junquiera. "Junqueira said Nubank, which will use the name Nu in Mexico, plans to issue the first credit cards in the second half of the year," reports Reuters. "Nubank says it has 8.5 million clients in Brazil, mainly credit card holders. Mexico has 36 million people without access to bank accounts, a concentrated banking system and good mobile internet coverage. Similar conditions contributed to fintech growth in Brazil over the last years."
Subscribe to the Lafferty Daily BriefingSIGN UP
© 1981-2019 Lafferty Group
Toll-free: +44(0) 800 772 3849
83 Victoria Street