How Challenger Banks And Fintechs Are Accelerating Crypto Adoption
The Crypto & Fintech love story
In spite of concerns over cryptocurrency's sharp volatility and involvement in fraud, crypto has been shunned by many main street banks. Meanwhile, challenger banks and fintech companies have been dipping their toes in the crypto pool.
The latest addition is the challenger bank N26 that in partnership with the Austrian broker Bitpanda started to offer crypto trading services within their app in Austria. The service dubbed N26 Crypto offers user the possibility to buy and sell up to 100 tokens including favorites like bitcoin and ethereum. For now digital assets cannot be transferred to other wallets. Based on the feedback from Austrian customers the feature will be pushed to other markets within the next 6 months.
According to the UK smart money app Plum there is also a “rising investor demand” across Europe for easy crypto trading. This resulted into Plum joining forces with Bitpanda to offer crypto trading from € 1 alongside its savings and investment service to its 1.4m customers. Plum's offer, however, starts with only 5 cryptocurrency coins and customers will be charged 2.5% commission on any cryptocurrency buy or sell orders that they place.
Fintechs are increasingly looking to offer crypto services via partnerships with industry specialists. The white label solution seems to be very popular. Instead of building the technical infrastructure from scratch over months or even years, customers can choose from a number of technical modules and then combine them to create a trading service tailored to their specific needs.
This has been demonstrated in earlier market news, and Bitpanda is a great example. Back in September 2021 they partnered with the French neobank Lydia to offer access to fractionalized shares, ETFs, and crypto trading from €1 to Lydias´ 5.5m users. The trading offer is integrated into the Lydia app via an interface, so customers still get the look and feel of the Lydia brand. But the transactions, the execution of trades and establishing the custody of assets are performed in the background by Bitpanda.
The German competitor Vivid started a similar offer for partial shares and crypto currencies in February, for which it is partnering with the Munich-based financial services provider CM Equity. Trading app Freetrade is also planning to move into crypto as part of a European push. Latin America’s leading digital bank, Nubank entered into the crypto trading ecosystem earlier this year, and recently launched its cryptocurrency dubbed Nucoin.
Revolut goes one step further and wants to make cryptocurrency mainstream. Starting November, Revolut customers will be able to spend their cryptocurrency on everyday purchases by using crypto-enabled cards. The new feature can be activated on any existing card within the Revolut retail app by switching the currency from fiat money to one of the available crypto accounts. Customers can also order a separate card, virtual or physical, to use it only for crypto payments. For a limited time, Revolut is giving customers 1% cashback on all crypto balance spend as long as they opt-in.
But is crypto trading doing so good? According to a recent interview of Revolut´s CEO Nikolay Storonsky with Bloomberg TV, cryptocurrency trading tools contributed 30-35% to the company´s revenue in 2021. In 2022 this amount dropped to just 5%, what Storonsky described as “quite sad from my point of view… I think crypto has a lot of potential for financial systems”. Despite this setback the company plans to continue to grow its crypto offering.
Similar experience has the US crypto and stock trading platform Robinhood. Crypto monthly active users and crypto revenue declined by 12% in Q3, resulting in 12.1m MAUs and $51m in crypto revenue at the end of Q3. The company also announced, it would continue to invest in the crypto industry, including a retail-oriented wallet for international customers and NFT features.
Cryptocurrencies: what's the outlook? Investors have already fled the market due to concerns about higher interest rates and liquidity constraints earlier this year, resulting in huge losses for bitcoin and other tokens. With the latest news on the FTX collapse the total crypto market cap is left under $800b, the lowest since January 2021.
📍Apple Launching Savings Accounts
A new saving account offered by Apple and Goldman Sachs lets Apple Card users deposit their "Daily Cash" rewards automatically without fees, minimum deposits, or balance minimums. In this way, users will be able to spend, send, and save Daily Cash directly from their Apple Wallets. The account will be primarily accessed via the Wallet app where users will be able to access a dashboard showing the savings account balance and interest earned. Apple did not disclose the interest rate yet. 👉🏻 Read more here
📍Smart Saving with Klarna
For its German customers, Klarna launches Pools, sub-accounts for smart saving. Customers can open up to 3 free sub-accounts. For each of them, users can set an individual savings goal from as little as €1. Depending on the target amount and the selected period, a monthly transfer is automatically made to the pool. Using "Rituals", bank customers can also set up two savings rules for each Pool. With the “Goal Aim” ritual, an individually selected amount is transferred to the pool at desired intervals, for example €40 every second Tuesday. With the "rounding up rule", the amount is rounded up to the next euro for each card payment and the difference is automatically transferred to the pool. Pools is intended for savers who have short- and medium-term savings goals, but who also want to have their savings available at any time. 👉🏻 Read more about Pools here
📍Discuss Money Easily Via Revolut Chat
No need to head to WhatsApp when messaging friends regarding the pending money for the last pizza party. The Revolut Chat, an instant messaging service within the Revolut app, is now available for UK and EEA customers. Based on customer request, to be able to clarify payment details within the app, rather than having to switch between different messaging apps, Revolut provides the ability to discuss money directly in the transfer section of the app. After tapping on one of the contacts the chat window will open. Users can then chat, send and request money using gifs and stickers, split bills. Alternatively, customers can opt out of the chat feature if they don't wish to use it. Additionally, users can block other users. The chat function is available between Revolut UK and EEA users, except of Revolut<18 user. 👉🏻 Read more here
📍New Loyalty Program With Revolut Shops
The new service, called ‘Shops’, lets users browse products from more than one thousand brands. Regardless of the Revolut plan a customer is on, users are rewarded with 3% instant cashback for every purchase, as long as they start their shopping journey from the Revolut app and pay with their Revolut card in full. The cashback is instant, unlike with other providers which can take up to three months. Shops´ users also have an option to split their payment using ‘Pay Later’. The service is currently available in Ireland. 👉🏻 Read more about Shops here
After initially launching Revolut ´Stays´, a accommodations booking service, which should compete with Booking.com, the company launched an extension to ´Stays´ called ´Homes´. ´Homes´ is Revolut´s take on AirBnB with additional 4% cashback on bookings depending on the customers subscription plan. The booking services are bundled with useful features for travelers like group bill splitting, affordable exchange rates, travel insurance or lost baggage cover. According to the company, its accommodation booking feature Stays has given more than €1.5 million in cashback to customers globally. 👉🏻 Read more about Homes here
📍Vivid Welcomes Business Customers
Over 500,000 customers are already using Vivid Money´s personal finance offering. The company now wants to target self-employed and freelancers with its business banking services. By creating a Business Pocket (a virtual sub-account wit a unique German IBAN) customers get access to a Platinum Business VISA card and can receive up to 2% cashback on card payments. The product was created in collaboration with Solaris. 👉🏻 Explore Vivid Business here
📍🇸🇰 Ahoj Trade Republic
The Berlin based fintech is now reaching 340 million Europeans in 17 countries. Additionally to existing markets Germany, France, Italy, Spain, the Netherlands and Austria, the company is rolling out its services in 11 additional markets including Slovakia. With the recent introduction of fractional investing, Trade Republic's brokerage platform can be enjoyed by more than one million customers. 👉🏻 Read press release here
📍Amazon Home Insurance Store
Amazon launched an insurance comparison site in the UK to sell home insurance. They partnered with three insurance providers, with more coming next year. The insurance store provides customers the possibility to compare different home insurance offerings and directly checkout via the portal. This sale will be commissioned by Amazon, but the percentage was not disclosed yet. 👉🏻 Explore Amazon Insurance here
📍Vert By Deutsche Bank
Deutsche Bank and Fiserv, launched Vert, a payment acceptance and banking services provider to small and medium-sized enterprises. Vert is the only German provider to combine payment acceptance & processing and traditional banking solutions. Vert clients benefit from an offering that includes faster payments, modern technology, acceptance of common payment types and an online dashboard providing transaction data and other business reports. 👉🏻 Explore more about Vert here
📍Instant Payments For All
End of October the European Commission has unveiled a draft law that would require banks in the eurozone to offer instant payments in euros at no extra costs. In fact, this move could improve cash flow for both households and businesses alike, and help small and medium enterprises, especially retailers, save money. According to the Commision, “on any given day, almost €200 billion are locked in transit in the financial system, a so-called “payment float”, that could now be freed up and be re-injected more quickly into the economy”. According to Reuters, only 11% of euro credit transfers were in the form of instant payments at the end of 2021. The draft law has to be approved by EU states and the European Parliament. 👉🏻 Read the draft paper by EC here
Beyond George Suggests
🎧 “Is Revolut Planning To Offer Mortgages?” The Big Tech Show from the Web Summit 👉🏻 Listen here
🎧 “Unlocking a new era of credit” Webinar by Tink & GE Money 👉🏻 Listen here
🎧 “Closing the investing gap” Beyond Two Percent Podcast Episode 👉🏻 Listen here
📚 Fintech Futures´ Banking Technology Magazine /November 2022 issue 👉🏻 Read here
📚 AltFi´s Digital Banking 2022 Report 👉🏻 Read here
Last but not least:
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