Tech Lowdown: Revolut, Stripe, GoCardless and Cashplus
This week’s roundup features Revolut’s banking license application, Stripe’s banking-as-a-service play, GoCardless nears unicorn status and Cashplus acquires icount.
Revolut submits application for UK banking licence
Revolut announced on Tuesday that it has applied for a bank licence in the United Kingdom to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The application comes as part of plans to create a financial super app.
A banking licence would allow the fintech to provide full-service current accounts with products like overdrafts, loans and deposit accounts. These would increase Revolut’s pre-existing products, such as commission-free stock trading, cryptocurrency trading, savings wallets, junior accounts and rewards.
The approval of the licence would enable customers to have the additional security of deposit protection under the Financial Services Compensation Scheme (FSCS) (up to £85,000 per person).
Stripe makes as banking-as-a-service play
Backed by several big banks, Stripe has launched a new banking-as-a-service API allowing online businesses to embed financial services in their platforms. Citibank and Barclays have taken part as global expansion partners and Stripe Treasury promises to remove all hassle associated with opening business bank accounts.
Shopify is taking part, working with Stripe and Evolve Bank to offer firms a fully tailored business account. Shopify partners will be able to access interest-earning accounts eligible for FDIC insurance. Customers can get near-instant access to revenue earned through Stripe, spend this directly from their balance with a dedicated card, transfer it via Automated Clearing House (ACH) or wire transfer and pay bills.
GoCardless nears Unicorn status with £70m investment
In a Series F round of funding, led by Bain Capital Ventures, GoCardless has raised $95m (£70m) which makes a total of $240m (£178m) in investment. The latest round brings GoCardless’s total valuation to $970m (£720m) – $30m off the $1bn unicorn status.
The fintech plans to use its investment to its open banking strategy, and expand its offering into the adjacent e-commerce market, challenging the dominance of credit cards in instant payments and making bank-to-bank debit payments available as a lower-cost alternative to cards.
GoCardless has plans to provide businesses with a complete open banking payment processing service, including features such as refunds, payment reconciliation and error handling.
“We believe that open banking is set to disrupt the payment landscape by introducing new, simpler and more secure ways of making bank-to-bank payments that will compete with the traditional card networks,” said GoCardless CEO and co-founder Hiroki Takeuchi.
Cashplus moves to acquire icount
Small business banking and credit service provider Cashplus has recently acquired icount and plans to complete its bank accreditation by the end of January. This acquisition will add £2m in monthly transactions and five thousand accounts to Cashplus’s portfolio.
Cashplus has signed an agreement to obtain its current account portfolio and is expected to close imminently as UK fintech’s first acquisition of 2021.
Cashplus is also in the last stages of its application to become a full UK bank, and expects to receive accreditation by 28 January.
“2021 is set to be a very exciting year for Cashplus,” commented Cashplus CEO Rich Wagner. “Our anticipated upcoming authorisation as a bank will allow us to better serve the UK small businesses and consumers that need our banking and credit services, and I’m pleased that we’ll be starting the year with this acquisition as a sign of our confidence.”