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Issue #124: Apple Expands NFC Access, Airwallex Hits $100B Milestone, And Is Klarna Really Jumping Into Banking In The US?
👋 Welcome to another edition of Fintech Radar, your weekly go-to source for deep insights into what’s happening in fintech.
If you’re new, here is a breakdown of what you can expect from each issue.
This weekly missive is written for founders, operators, and investors in fintech. I prioritise quality, depth, and provocation over rehashing press releases and partnership announcements. Rather than simply covering news, I dig in and explore the implications of what’s happening in the industry — without all the fluff.
I aim to spark discussion, highlight emerging trends in fintech that could become central themes in the coming years, and help you connect the dots.
If you missed our recent editions, you can catch up here. Some previous issues you might want to check out if you’re new include “A Deep Dive Into The Cash App's Growth Machine”, “The Future Of Payment Initiation”, and “Current: Doing It Differently”.
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⤷ Klarna jumps into banking business
🏃♂️ The Rundown: Klarna is expanding into retail banking by offering digital wallets and savings accounts in the U.S. and 12 European countries. The new services include a "Klarna balance" feature for storing money, cashback rewards of up to 10% for app purchases, and interest rates of up to 3.58% on deposits in the E.U.
🥡 Takeaway: In some ways, this is old news. Klarna has held a banking license in Sweden for years and has offered accounts in Germany since 2021. The expansion across the E.U. seems expected, given they can passport their Swedish license.
What’s more interesting is the U.S. side of this story. As the article points out, Klarna has now tried several different approaches in the U.S. Most recently, they relaunched their credit card product, an upgrade on their previous crack at cards.
Now, offering a wallet product with rewards is another attempt to bring customers into the Klarna shopping app experience. While some might frame this as Klarna attempting to take on traditional banks, it’s likely not the case. As the article notes:
“Money held in Klarna’s accounts won’t receive the same FDIC insurance guarantee as funds held at U.S. banks. The company expects the new accounts will ‘be primarily a vehicle for consumers to receive cashback and get their refunds faster,’ and doesn’t ‘anticipate U.S. consumers holding large amounts’ in such accounts,” a spokesperson said.
If they were taking on banks, you’d have expected them to build a more robust offering. My guess is that this move is all about driving engagement within their app, which seems to be where they’re focusing their attention lately.
⤷ Amazon and Barclays launch co-branded credit card
🏃♂️ The Rundown: Amazon and Barclays have launched a co-branded credit card in the U.K. that offers rewards on everyday spending, redeemable for gift cards on Amazon.co.uk.
Customers earn 1% back on Amazon purchases and varying percentages on other spending, with additional benefits for Amazon Prime members during special shopping events. The card has no annual fee and includes a £20 gift card upon approval, furthering the partnership between Amazon and Barclays.
🥡 Takeaway: Co-branded cards might seem like an old-school approach to “embedded finance”, but they work. Amazon continues to demonstrate this with its latest launch, following the introduction of a similar card in Germany (this time partnered with Santander as the issuing bank).
The model remains consistent: no fees, cashback on Amazon purchases, and extra perks like gift cards and bonus points for shopping on Prime Day. It’s a simple approach, but it’s clearly effective.
⤷ Apple set to open up access to NFC tech to third-party app developers
🏃♂️ The Rundown: Apple will soon allow third-party app developers in select countries to use its NFC contactless payment technology starting with iOS 18.1.
This update enables in-app transactions for various uses, including in-store payments and event tickets, while requiring developers to enter a commercial agreement and pay fees to ensure compliance with security standards. This decision follows the European Commission's antitrust investigation and aims to broaden access to iPhone tap-and-go technology.
🥡 Takeaway: I recently read Mike Maples’ book Pattern Breakers (a fun read, but you can get the gist of the book by listening to one of his numerous podcast appearances). In it, he discusses how including a GPS chip in the iPhone 4 was a technology inflection point that enabled ride-sharing and on-demand food delivery to take off. It’s an interesting analogy for Apple now opening access to its NFC tech.
I’ve previously noted that this might not be the game-changer some expect for many fintech use cases—why install a new bank “wallet” when I already have a card in my Apple Wallet? The answer might be simple: bank incentives in the form of cashbacks, etc.
The only open questions in the case of banks will be what the fee structure will look like. I, for one, can’t see Apple giving up all of that juicy Apple tap to pay revenue (which, for example, in Australia is now likely well north of $110m).
That all said, I’m personally more interested in seeing what net new use cases this unlocks. Apple’s press release, for example, highlights the potential for:
…in-app contactless transactions for in-store payments, car keys, closed-loop transit, corporate badges, student IDs, home keys, hotel keys, merchant loyalty and rewards cards, and event tickets, with government IDs to be supported in the future.
At the very least, I can see this move eliminating awkward Q.R. code interactions for ticketing, which might not be an “inflection point” but will be a significant UX improvement for users.
⤷ Airwallex processing volume surges past $100 billion
🏃♂️ The Rundown: Airwallex has surpassed $100b in annual processing volume, marking a 73 per cent increase year-on-year, and is approaching a $500 million annual revenue run rate while achieving cash flow positivity.
The company's growth is significantly driven by its expansion in North America, where revenue has surged over 300 per cent, alongside strategic investments in local compliance and infrastructure.
🥡 Takeaway: Let me start by saying this is a massive milestone for Jack and Lucy over at Airwallex. It’s great to see them and the team go from strength to strength. Bravo 👏👏
This also highlights the growing demand for multi-currency accounts. While the idea of being “global from day one” has become somewhat of a meme in smaller markets like Australia and New Zealand, providing the necessary financial infrastructure is both challenging and lucrative — as publicly listed Wise has shown.
In many ways, companies like Airwallex and Wise offer a counterpoint to U.S.-centric business banking startups like Ramp and Brex. With Airwallex accelerating in North America, it will be interesting to see which approach wins out (global or local specialisation) in the highly competitive U.S. market.
⤷ ANZ launches first-of-its-kind A.I. Immersion Centre in partnership with Microsoft
🏃♂️ The Rundown: ANZ has launched the A.I. Immersion Centre collaboration with Microsoft, aiming to train 3,000 leaders in generative A.I. to enhance customer experiences and operational efficiency.
The bank has invested in Microsoft’s A.I. tools. This includes 3,000 licences for Copilot for Microsoft 365 and GitHub Copilot, which, according to the press release, have already shown significant productivity improvements among employees.
🥡 Takeaway: A week after CBA launched AI courses for its employees, another Big 4 Aussie bank, ANZ, has rolled out its own “AI Immersion Centre.”
This feels a bit like a version of the “Can I copy your homework?” meme, but as I mentioned last week, this is what I think we can expect from many major banks as they try to appease investors who are asking, “But when A.I.?” In ANZ’s case, they can now point to their 3,000 GitHub Copilot licenses along with their “A.I. Immersion Centre” as their foray into AI.
⤷ Conduit’s cross-border payments expand from LatAm into Africa with $6M round
🏃♂️ The Rundown: Conduit, a B2B cross-border payments platform, has expanded from Latin America into Africa after securing a $6m seed extension. The company is focused on addressing the high costs and high costs and slow processes by offering faster and more transparent transactions.
🥡 Takeaway: If you’re a regular reader of F.R., you’ve seen my thoughts on the massive opportunity that cross-border payments represent. For those who haven’t, here’s the gist: the sector is characterised by high fees (with some of the highest in the world found in Africa), a relatively manual and cumbersome process for users, and all this is happening in a rapidly growing market. As noted in the article, the cross-border payments market is projected to reach $250 trillion by 2027. It’s a huge opportunity.
Conduit isn’t the only startup that’s recognised this opportunity; the B2B money movement is a rapidly growing segment across LATAM and Africa.
What’s particularly interesting here is Conduit’s shift from “…an API to connect fintechs, neobanks, and legacy financial institutions with crypto-backed earning products…” to a B2B remittance business. It’s a stark reminder that timing is everything in crypto, and sometimes, the big opportunities are still in the legacy world of F.S.
⤷ Amount raises $30m to help credit unions with digital lending
🏃♂️ The Rundown: Amount last week announced they’d raised a $30m round — which was done on a SAFE note. Founded in 2020, Amount focuses on helping traditional banks digitise processes like account openings and loan origination and sees significant growth potential in the credit union sector. Amount is aiming for profitability from an EBITDA and net income perspective by next year, projecting $50m in revenue for 2024.
🥡 Takeaway: A quick story. I remember speaking to the innovation team at a bank about their plans to go fully digital in their origination process back in 2018. They confidently told me they were just 12 - 18 months from being fully digital end-to-end. Impressive, right? Fast forward to 2024, and the project still hasn’t launched.
To be honest, I assume the project was scrapped years ago. The point here is that nearly every bank is looking to improve its origination process, which is currently bogged down with paperwork and endless back-and-forths. It’s a huge opportunity.
That said, the usual challenges remain. For example, in Australia, decades of unabated growth in residential housing prices have meant that banks have been making money hand over fist, whether it's new loans or refinancing. So, fixing their origination isn’t the priority; it’s continuing to fill the bucket with new customers. Beyond that, every bank is either going through or has just gone through a “digital transformation,” meaning something else needs to be done before they genuinely digitise origination.
It’s a challenging space but one that is still ripe for disruption. It’s great to see companies like Amount getting the funding they need to keep pushing forward.
⤷ The Future of Crypto with Brian Armstrong, CEO of Coinbase
It’s been a while since I last recommended a podcast featuring Brian Armstrong, Coinbase’s CEO, so here’s a fresh one for all the Coinbase nerds out there.
In this episode of the Moment of Zen Podcast, Armstrong discusses what he’s currently focused on at Coinbase (spoiler: it’s all about product), how Coinbase has evolved its approach to dealing with Washington, and his insights on the current crypto landscape. Definitely worth adding to this week’s podcast rotation.
⤷ From Lean Startup to Long-Term Thinking: Eric Ries Reinvents the Stock Exchange
Most of us know Eric Ries as the author of The Lean Startup, but what’s under-discussed is his current startup, the Long-Term Stock Exchange — his attempt at building a new type of stock exchange. In this podcast, Ries talks about the challenges of gaining SEC approval for a new exchange and the struggles companies (especially public ones) face between short-term pressure and long-term vision. It’s a wide-ranging conversation and another pod worth adding to this week’s rotation.
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