Go big or go home. Scale up or die. It's practically a badge of honour for a fintech company to cause controversy (aka leverage advertising budget for maximum coverage) by making outsized claims. Four years ago, Transferwise paraded its own employees through London in their underwear: "Why are we naked? It's all in the name of transparency. You see, banks hide a lot. Especially their fees. Now there's a clever new way, with nothing to hide." In fairness, neobank Revolut's ads on the London Tube last week were certainly paid for. The message was: "To the 12,750 people who ordered a single takeaway on Valentine's Day. You ok, hun?" Some people were appalled at Revolut's attitude, including Iona Bain's Young Money Blog while others picked up the phone to call the City watchdog, as the ad suggested that Revolut has more access to the detail of your spending than one might imagine. This is both true and not true, depending on the sets of partners one uses. Challenged by the FT, Revolut's spokesperson conceded that the ad should have had a note to say it was a spoof, and admitted that the bank could not tell what customers had purchased. All clear then? The Advertising Standards Authority said in a statement it has received a small number of complaints about the ads which it has passed on to the FCA.
ECB board member Yves Mersch is a serial complainer about new technologies but he's found something he likes which he hopes will save Europe from all kinds of horrible American inventions such as credit cards and bitcoins, never mind the Googles, Facebooks and Amazons: instant payments. Unfortunately most European banks have more immediate problems than instant payments, including shedding value at a precipitous rate. "The industry sees the implementation of a European infrastructure for instant payments as an opportunity to instantly clear and settle card transactions, which would offer a possible way of supporting the interlinking and interoperability of national card schemes," he says. "Efforts to ensure the interoperability of schemes should be strengthened and should aim to foster a European identity, for example by using a common European logo to show users that their cards can be used across the EU." Brilliant idea Yves. "A more radical supposition entails the extension of instant payments to the point-of-sale, bypassing traditional card schemes altogether." This is beginning to sound rather like SWIFT's new offering. But a network of networks has indeed been growing, including India's Rupay, Turkey's TROY and Russia's MIR, aided by Discover, which has moved towards integrating local networks.
One outstanding part of the FT series 'House of Wirecard', produced by the FT's Alphaville team, is the name, suggesting a flimsily-built construction on the one hand while also referencing the-then red hot Netflix series that imploded around the start of the new US administration. The FT appears to have a good source deep inside Wirecard, and has been tracing the company's expansion even as it frequently challenged its methods. As a proto-fintech, Wirecard's global expansion was in bits and bobs. In Asia, it took over much of Citi's portfolio, and looked to gain licences across the region. Last week the FT produced a long piece tying together various strands of its investigations into Wirecard, pointing out that Wirecard had in 2018 surpassed the value of Deutsche Bank and Commerzbank on Germany's DAX industrial index. (Deutsche Bank is perhaps not a fair comparison as its value had been plummeting steadily for several years.) Whose fintech darlings are going to blow up first?
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