September 12, 2022
Illustration: Christopher T. Fong/Protocol
Good morning, and welcome to Protocol Fintech. This Monday: rethinking the credit score, grading Congress’ crypto views and Revolut Pay.
It was royally offensive. Mere instants after Queen Elizabeth passed, opportunists were creating memecoins in her name. “The Queen is dead, but grift lives forever,” Tom Carreras wrote for Crypto Briefing. The blockchain is censorship-resistant, of course, and some level of scammy behavior will always be present. But would it be too much to ask for, I don’t know, a little restraint?
— Owen Thomas (email | twitter)
Credit scoring doesn’t work well for a lot of people. Those with low incomes, people of color and immigrants have been historically sidelined by the current system. Some of the nation’s most successful struggle with low credit scores despite their wealth. And if your fortune comes from crypto, you might as well be invisible to the credit bureaus.
Where some see flaws, startups see opportunity. Finding a way to accurately underwrite those excluded from the existing system could mean unlocking a whole new customer base for lending and investment products.
More data might be the answer. Rent or utility payments are not typically integrated into credit scores, for example.
Some think the problem requires new systems for evaluating credit. That could mean coming up with a replacement for the famous FICO score, or even the credit bureau system itself.
Regulators have been eyeing cash flow underwriting, a common approach for evaluating those without much traditional credit history, for years. Considering crypto holdings is even trickier. Expect more guardrails to emerge as the industry matures, lest these attempts to fix the credit score cause more problems than they solve.
— Veronica Irwin (email | twitter)A version of this story first appeared on Protocol.com. Read it here.
Software is changing payments and banks should care: At Modern Treasury, we built a platform to complement banks’ existing products to help them prepare for a future led by software. We’re here to help them future-proof their business so that they can participate in and lead in the next phase of financial services.
The Treasury Department will sound a warning on crypto in upcoming reports. A series of reports ordered by President Joe Biden are expected to lay out potential risks to consumers if crypto is not properly regulated. The reports will also recommend the U.S. continue working toward a CBDC, but only implement one if further study finds a clear national interest.
Credit card purchases at gun stores will be tracked through separate merchant code. The plan from Visa, Mastercard and American Express to add the new category comes as gun-control advocates have pushed for the financial industry to flag suspicious firearm sales.
JPMorgan Chase struck a deal for payments startup Renovite. The acquisition is part of an effort from the bank, CNBC reports, to offer more merchant services and fend off threats from fintech firms including Stripe and Block.
Revolut has launched one-click payments. Revolut Pay puts the London-based fintech up against PayPal and Apple.
A Pew Research Center survey finds payment apps are ubiquitous — and perhaps still too vulnerable to manipulation. Pew's data offered some good news for peer-to-peer payment apps: 76% of Americans have used at least one of PayPal, Venmo, CashApp or Zelle, with convenience being the top reason. Convenience has its downside, though, as about 1 in 10 users reported falling victim to a scam on a P2P app.
A new crypto lobbying group has a report card for Congress. The Crypto Action Network's grading for crypto-friendly policy gives an “A” to Republican Sens. Cynthia Lummis and Ted Cruz, as well as Democrat Sens. Kirsten Gillibrand and Ron Wyden. Rep. Brad Sherman and Sen. Elizabeth Warren, both Democrats, received an "F."
Inside Apple's deal with the feds for mobile driver's licenses. Documents obtained by Fintech Business Weekly show Apple entered into a research and development agreement with the Transportation Security Administration beginning in March 2019 to launch the digital credentials.
Mark Cuban isn’t too mad about dogecoin co-creator Jackson Palmer calling him a crypto profiteer. "Sounds like the same thing that has been said about every new technology I've been involved in," he told Insider, and adding in an email to Decrypt, “Everyone can say what they want. I’m still a huge fan of crypto.” Palmer is not — after creating dogecoin in 2013 with Billy Markus as a joke, he’s turned into a crypto skeptic.
Finovate Fall is this Monday through Wednesday in New York City. The fintech event brings founders, investors and media together to network and listen to over 100 expert speakers and over 60 live demos.
SALT New York also returns this week Sept. 12-14. Discussions will center on topics like bitcoin, alternative investments, fintech, sustainability and infrastructure.
Lend360 runs through Wednesday in Chicago. Speakers represent companies like NerdWallet, TransUnion and Trust Science at the fintech lending conference.
Blockworks’ Digital Asset Summit is Tuesday and Wednesday in New York City. The conference is primarily attended by asset managers and financial services professionals working on crypto from an industry perspective.
On Tuesday, the Senate Committee on Banking, Housing and Urban Affairs will hold a hearing on how consumer fintechs are impacting workers. The speakers are Rachel Gittleman of the Consumer Federation of America, Financial Technology Association CEO Penny Lee, law professor Todd Zywicki and David Seligman from Towards Justice, a nonprofit law firm.
The Fintech Talents Nordics Conference is Wednesday. The virtual conference highlights fintech successes from countries in Northern Europe and the North Atlantic.
On Wednesday, Public Citizen is hosting a virtual conversation between CFPB Director Rohit Chopra and Public Citizen president Robert Weissman. The event is open to the public: Just RSVP online to get the Zoom link.
The House Committee on Financial Services is hosting a hearing Wednesday on the impacts of banks leaving the Caribbean. The 10 a.m. Eastern event is available to watch online.
On Thursday, the Senate Agriculture Committee will host a hearing on the Digital Commodities Consumer Protection Act. Representatives from Coinbase, the Crypto Council for Innovation, Citadel Securities, the Stellar Development Foundation and the Center for American Progress will speak.
The Senate Banking Committee will hold an SEC oversight hearing on Thursday. The sole witness will be SEC Chair Gary Gensler.
The Crypto Valley Summit is this Wednesday and Thursday. The event focuses on showcasing the Swiss blockchain ecosystem, with speakers representing CV VC, Bitcoin Suisse and a range of Swiss startups.
Next Monday, Sept. 19, the Protocol Enterprise team will host the online event “Customer Experience in the Enterprise.” The event will cover the tech tools, tricks and real-life strategies for providing a great, end-to-end customer experience in enterprise tech.
Software is changing payments and banks should care: Activities that once took place in person or over the phone—getting a loan, making a payment, investing in a security—now occur entirely within software. Covid has only accelerated this trend. To remain a part of clients' financial lives, banks need to play well with software.
Thanks for reading — see you tomorrow!