GenZ Tea ☕️:
Studies show that Gen Z users actually prefer financial institutions instead of neobanks according to Marqueta.
“Gen Z still uses cash and almost 90% of them are banking with the traditional financial institutions. It’s not too soon (or too late) to market to the youngest people doing banking.”
This means fintechs are on their way but have still uncaptured a major market opportunity. As the banking ecosystem shifts, it will be interesting to see how these numbers change in the coming years.
Hey Tea Sippers,👋
We hope you are doing well, and that you had a good week. We have one major news story for you today, and it’s that Wells Fargo tells it’s customers it’s closing all lines of credit. What could this mean for the future of traditional banking and the emergence of fintech? Read more about it here.
Tea Pods ☕️:
In this week’s rendition of Tea Pods ☕️, I would like to introduce you to the Wharton Fintech Podcast led by our friend Miguel Armaza. The Wharton Podcast is committed to educating individuals who want to learn more about fintech. If you have some spare time take a listen to this episode, with the co-founder of Brex- Henrique Dubugras. Brex is an all-in-one financial product for businesses. If you want to understand their story and learn more about them take a listen here.
What’s the Tea Today? 🤔
Ready for this week’s tea?☕️ We are talking Apple’s new buy now pay later product 🤝, and railsbank with a new service, fintech-as-a-service 💳.
Anyways, short and big stories ahead, get your tea ready and start sipping. ☕️
Also, before you get reading, don't forget to join our waitlist! Thanks. 😝
Fintech-As-A-Service
Railsbank is a London-based company, who builds APIs for fintechs so that they can create their own financial products, is expanding. They are entering into a market that is increasing drastically. Embedded finance is projected to reach $7.2 trillion by 2030, and they don’t want to miss out.
Raise. Railsbank just rose 70 million Dollars to grow their product internationally.
Market. The credit card market in which they want to disrupt is currently evaluated at $4 trillion.
Valuation. Their current valuation is projected to be somewhere near the hundred million and is projected to hit a billion soon.
The Big Gulp ☕️: It looks like fintech is taking over space and traditional banks may be in trouble. Financial products as a service are now being recognized as one of the most fundamental pieces in the financial services industry overall. The space continues to evolve very rapidly, and many are optimistic about what this will mean for companies later down the line. The possibilities are endless, and Railsbank is ahead in a big industry that has yet to peak yet!
Buy Now Pay Later
Buy now pay later is running the financial space currently. Users are attracted by the ability to pay for an expensive item in installments. When things get hot of course big players want in. So, Apple has plans to create a product that lets shoppers pay for products in installments, and best of all they are backed by GOLDMAN SACHS!
BNPL. It is marketed as the next generation of credit card products.
Addition. Apple-Pay now has a new addition, which is Apple BNPL pay.
Competition. Apple faces big competition with Afterpay, Klarna, and Affrim in the space.
“Afterpay said competition reinforces the significance of the sector and that each BNPL player operates a different model and generate revenue in different ways.”
The Big Gulp ☕️: Apple always gets FOMO, and this is a prime example. They feel left out the BNPL party and now they are joining. This space has been dominating for a little while and now all the major players want to get in. Companies are a little worried about what Apple entering the space may do for them. This will be interesting to watch over the next few quarters.
Extra Tea ☕️:
Revolut: The financial “super-app” just raised $800 Million in funding with a valuation of $33 Billion.
Payments: Paypal is no longer on top in the mobile payments industry
Investment: Investments in Fintechs are becoming a big deal.
BNPL: BNPL, Zip Co. partners with Microsoft.
Sencha “Tea” Fact of the Day 🍃:
“Only 8% of the world’s currency is physical money.”
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