The Data Dive: The Brexit Blues, Amex’s Lending Power-Play, Lyft Gets Mysterious

Normally we reserve the opening sentence of the Data Dive for a joke about the week’s news. This week, with the string of tragic events nationwide, we can think of nothing funny to say. We offer our condolences to all who’ve lost this week and hope with the rest of the nation for better headlines to come.

In payments and commerce news, the sector as whole decided to swear off summer vacation in favor of going into good old-fashioned overdrive as Brexit winners and losers are shaking out, Amex decided the time has come to take on Square and Lyft seems like it might be looking to sell out.

Brexit: Win, Lose Or Draw 

As the news about the Brexit moves from being wholesale apocalyptic to being a bit more mysterious (as whether it is going to happen or what leadership team will be in place exactly to decide remain big unknowns), the shape of the shake-up for some global retail and finance players is becoming a bit clearer.

On the good news side of the ledger is Amazon – as reports indicate so far the feared hit to the firm’s bottom-line from the tanking pound and European uncertainty have not panned out. At least not yet.

According to reports, Amazon has yet to see any impact to its U.K.-based sales as a result of the Brexit vote. Doug Gurr, U.K. country manager at Amazon, told assembled reporters on Wednesday (July 6) that, while the company’s British-based operations were humming along in every degree they had been before the Brexit, it’s still too soon to declare that Amazon is immune from the problems that are mounting for other retailers.

“There’s a lot of details to be worked out,” Gurr said. “We don’t know exactly what the regulatory environment will be; we don’t know exactly what the terms of the new separation will be.”

Amazon will move forward with plans to hire 1,000 new employees in the U.K. by the end of 2016. That would bring Amazon’s U.K. employee footprint to 15,500 people.

Apple, on the other hand, has not faired so well – or at least engendered real fears from the team over at Citibank that the Brexit is likely going to be a pretty big headwind for Apple.

Citi lowered its revenue estimates for Apple to $41.2 billion for Q3 the previous estimate was $42.2 billion. Earnings per share were also reduced from $1.40 to $1.35.

“We are lowering our estimates for June and September quarters given potential for lower demand from macro uncertainty (Brexit related), currency volatility and lengthening replacement cycles (average replacement rate has gone from around 24 months in calendar year 2013 to about 28 months recently) and our model implies replacement rates could extend to 30 to 36 months,” the group of Citi analysts wrote in the note.

Apple’s revenue is in total about 13 percent exposed to the E.U., and about 2.3 percent is linked directly to the United Kingdom. Given the pound’s recent free-fall into 31 year lows, U.K. citizens are suddenly finding they enjoy a lot less buying power then they did about a month ago.

Citi is still maintaining a Buy rating for Apple stock.

Also hit with a bad case of the Brexit Blues last week was Bank of America, which has apparently been forced to call off a major sale.

Reports early last week indicated that Bank of America is pulling the plug on the sale of its MBNA credit card business that holds around 11 percent of the UK’s overall credit card market. Valued at approximately £7 billion, MBNA is said to have attracted interest from Lloyds, Barclays and Santander UK – however, after the Brexit vote, three anonymous sources close to the deal informed FT that average bids for MBNA have fallen by as much as a third since Leave conquered Remain.

“[MBNA] has just had 20 to 30 percent wiped off its value overnight,” one source told FT.

No official word yet from either BoA or its potential bidders.

We’ll keep you posted on the Brexit carnage as it unfolds.

American Express Vs. Start-Ups 

American Express may just be about to offer us all the financial services title fight of the year as it moves to directly challenge those small speedy upstarts – especially the teams at Square and OnDeck Capital.

If recent reports are accurate, Amex is about to go live with an online lending platform that will be geared toward small business clients. Slated for public unveiling later this year, Working Capital Terms is designed to give Amex’s SMB client base loans that can range from the minute ($1,000) to the momentous ($750,000).

The fact that the relationship is already in place with the would-be working capital borrower means that loans can be approved with relative ease and speed, likely within minutes. The terms of the loans themselves would stipulate a 0.5 percent fee for a 30-day loan and as much as 1.5 percent for a loan that is extended across 90 days.

 Targeted loan volumes remain unknown.

In an interview with Bloomberg, Susan Sobbott, Amex’s  president of global commercial payments, stated:

“We’ve combined the convenience of the online lender with the competitive pricing of a bank loan. It’s a big opportunity for us to go into an area where businesses want to pay vendors that don’t accept any credit cards.”

Does American Express also smell some blood in the water?

Online lenders have spent the last several weeks seeing their share prices eaten alive by public markets. Fintech startups once praised for speed in the wake of Lending Club’s explosion are now a stability concern. American Express – though battered over the last year’s loss of Costco – doesn’t bring those worries to the table.

And online lending is not entirely new ground – the firm already has a relationship in place with Lendio, through which the pair offers longer-term loans.

“We have much more background in understanding how businesses perform, how they can repay their loans. We think that’s really going to help us perform better in this space,” said Sobbott.

Is Left Getting Ready To Sell-Out? 

The rumor mill is spinning up more about Lyft these days.

The Uber competitor is reportedly attempting to generate interest in either investment via additional funding – or possibly interest in purchasing it wholesale.  At least, if reports in Reuters are accurate.

The speculation comes as Lyft has been working with  Qatalyst Partners for the last several weeks. Qatalyst is based in Silicon Valley and – according to those “familiar with the deal” – they have been brought on board to explore capital raises or a possible Lyft sale. Reports also indicate that investment interest has been high – as firms have poured tens of billions of dollars into the transportation sector in the last decade to the tune of $38 billion.

Qatalyst was an adviser to LinkedIn as it sold itself to Microsoft.

Among possible scenarios, current investors, such as Didi Chuxing and General Motors, could boost their stakes. One unnamed investor told Reuters the Didi stake could be increased with a coordinated push by an automaker. GM, for its part, has been on the record as aiming to increase its relationship with the ridesharing service. The auto giant has been offering a newer service to users, through Lyft, in which the two offer GM vehicles to drivers to make money offering rides (they rent the GM vehicles).

Profitability has been mixed in the ride services sector, and Lyft has not yet shown black ink on its bottom line, with $1.9 billion in sales, as tied to bookings that were logged in May.

So what did we learn this week?

The Brexit remains a contagious mess – and though Amazon so far is immune, even they’re concerned. American Express is about to see if old school FI’s are ready to fire back across the bow at the new schoolers. And Lyft is getting ready to do …. something.

What exactly? You’ll know as soon as we do.