B2B Payments

FinTech Firms Make Inroads In Switzerland

In Switzerland, the tally of FinTech firms grew by 62 percent year over year, aided by a favorable regulatory climate, according to a recent study.  And elsewhere, in Africa, significant funding rounds demonstrate a commitment to mobile lending.

In any number of countries spanning the globe, FinTech firms continue to make inroads into financial services, with at least some encroachment onto traditional players’ turf.

In one recent example, reports found last week that FinTech firms in Switzerland are gaining traction, as noted by CoinTelegraph, while the traditional firms they compete against are “stagnating.” The report, titled “IFZ FinTech Study 2019,” showed as many as 356 active FinTech companies in the space, up 62 percent year over year as measured in 2018.

“The declining value added by the Swiss financial industry to the total income of the Swiss economy is a consequence of the steadily decreasing relevance of traditional financial institutions. Reasons for this development include new business models that make some services provided by banks obsolete,” stated the report.

The regulatory environment is helpful for that growth, according to the findings.

Furthermore, the report noted examples of “Uber or Airbnb, [where their] solutions seamlessly integrate the payment process without the involvement of traditional banks.”

Separately, in Africa, reported Quartz, a Series C funding round — the largest ever by a FinTech focused on the region — brought $170 million to Branch International, split between $100 million in debt and $70 million in equity. The round was led by Foundation Capital and Visa. Participating investors included Andreessen Horowitz and Trinity Ventures, among others.

Branch also has a partnership in place with Visa, offering preferential loan terms for merchants based in Africa, which in turn accept Visa on their mobile devices. The borrowers, according to reports, will be able to withdraw the funds from ATMs through the use of “virtual credentials,” even if they lack access to bank accounts or debit cards.  

The company has 3 million users, spanning Tanzania, Nigeria, Kenya, India and Mexico. Branch uses a broad swath of data — spanning call logs, bill payments and bank balance messages — to calculate credit-worthiness. The loans range from $2 to $700, and interest rates can touch 21 percent, according to Quartz, depending on the country. The site noted that, of several parameters listed in The World Bank’s Doing Business report, access to credit has ranked as one of the biggest problems that arise when doing business in Africa.

According to reports, Branch CEO Matt Flannery said, “We’ll use [the money] to deepen existing business in Africa. Later this year, we’ll announce high-yield savings accounts … in Africa.” The funding will also support international expansion, an effort that may extend to Brazil and Indonesia.

The latest funding round comes on top of the $70 million raised last year, according to the publication. In addition, Branch expects to see its top line touch $100 million in revenue this year. Some 70 percent of that tally will come from Africa, according to the CEO.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.