Robinhood announces Checking & Savings Accounts Cash Management Platform

Earlier this month, Robinhood made one of its biggest announcements to date: Robinhood Checking & Savings, a new banking service built into the app that would pay users 3% annual interest, with no fees or minimum deposits, and it would all be protected by the SIPC (Securities Investor Protection Coorporation). On top of this, Robinhood said users would not need to invest with Robinhood to use the service, which was intended to launch later that week.

However, the fintech quickly received backlash from Wall Street. As it turns out, Robinhood never notified the SIPC of its plans. If it had, the SIPC would have reminded Robinhood that it only protects accounts intended for the purchase of securities. In other words, any deposited funds that Robinhood users did not intend to invest would not be SIPC-protected.

This development may have put Robinhood’s goal of 3% interest in jeopardy. At the time of the announcement, Robinhood said it could sustain that rate by investing unused customer assets in government securities (helped by rising interest rates) and through its debit-card partnership with Mastercard, where the two would split profits. It is unclear if that partnership is intact, but Robinhood has since withdrawn all references to the 3% rate. It has also changed the name of the service to Robinhood Cash Management and will re-announce its launch at some point in the future as it works out details with regulators.

Note: Robinhood Crypto is now supported in Illinois!

Revolut obtains European Banking License

The UK-based personal banking fintech was granted its banking license by the European Central Bank in December. While it won’t lead to any immediate changes. Revolut says receiving the license will enable them to roll out the following features over the next year or so:

  • European Deposit Insurance Scheme (EDIS) protection on funds for up to €100,000.
  • Overdraft and Personal Loan support.
  • UK Direct Deposit support for recurring payments such as electricity bills.
  • In-house payment processing to improvable scalability.

The upcoming features are part of what they’re calling ‘Revolut Bank’ and should help the fintech compete with N26 in Europe as Revolut looks to expand to other markets.

Coinbase adds ZEC support, announces Coinbase Earn

In December, Coinbase announced it would now support buying and selling ZCash (ZEC), a privacy-oriented alternative to Bitcoin that has picked up a strong following among crypto asset investors and developers. This follows Coinbase’s announcement of Basic Attention Token support in November and its intention to add 30+ more crypto assets in the future.

The fintech also launched Coinbase Earn, a compliment to its educational resource, Coinbase Learn.

Coinbase Earn is a new educational partnership with the 0x protocol that enables users to earn ZRX tokens by completing various tasks intended to educate them on the value and potential of crypto tokens. It is currently invite-only, so only those who received an email invite have the opportunity to complete ZRX-earning tasks at the moment. For the rest of the public, educational videos are free to watch and there is a waitlist to get private access.

Yahoo Finance names Square its Company of the Year

2018 was a big year for Square. The payments fintech launched a new product, Register, at the end of 2017 and opened this year at a stock price of $34.70. A number of subsequent acquisitions and product launches/updates saw its stock rise to $101.15 in October, though it has since fallen to $56.44. Yahoo Finance’s article on the announcement can be found here

Tencent and Hang Seng Bank Form FinTech Partnership

Hang Seng Bank, one of Hong Kong’s leading public companies in terms of market capitalization (around $42.5B USD) has agreed to form an alliance with Chinese and worldwide e-commerce giant, Tencent, on a host of fintech-related initiatives.

The agreement will combine Hang Seng’s vast network in Hong Kong with Tencent’s expertise in areas such as AI, machine learning, and blockchain. The two firms will work together to develop a remote account opening system (mainly for off-shore bank accounts) that will tap into Tencent’s Weixin mini-programs, which act as sub-apps within the WeChat system. Hang Seng will provide a merchant-acquiring service for Weixin Pay and WeChat Pay HK that will enable customers to make mobile payments at designated merchants in Hong Kong.

Gilbert Lee, head of strategy and planning at Hang Seng, states that the collaboration will “help both firms provide Hong Kong and mainland China customers with a growing range of efficient and convenient services that meet their evolving needs.”

Visa Buys Payments FinTech EarthPort Plc

Earlier this week, Visa announced its acquisition of the UK international-payments fintech for £198M ($252M). The valuation is four times greater than its stock suggests, but Visa is confident in the fairness of the price following Earthport’s recent partnership with Ripple Labs. EarthPort stock surged to match its new valuation of 30 pence per share after the announcement.

EarthPort has become one of the fastest growing facilitators of international transactions, claiming to remove the inefficiencies and unnecessary fees behind cross border payments. Its clients include TransferWise, Bank of America Merrill Lynch, HyperWallet, and Xoom, and it made major headlines by partnering with Ripple this year. Through the partnership, EarthPort has built an API to integrate the Ripple protocol into its payment network and will apply the same compliance and protective frameworks as it does to other payment channels.

It is unclear how Visa will implement EarthPort or its Ripple API into its own operations, but there is speculation that the acquisition opens the door for Visa to experiment with Ripple itself. Ripple is widely regarded as one of the best payment digital assets due to its scalability and low cost so, at the very least, the partnership could give EarthPort an edge on its competition and justify its high valuation.

Posted by:Metin Saraoglu

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s