August 22, 2022
Photo: Brandon Bell/Getty Images
Good morning, and welcome to Protocol Fintech. This Monday: the new fintech consumer, layoffs at Stripe and the FDIC’s crypto crackdown.
Venmo was something PayPal picked up almost by accident when the larger company bought Braintree in 2013 in an effort to better compete with Stripe. Braintree itself had bought Venmo a year prior as part of a nascent plan to build a consumer wallet. Rather than fold Venmo into PayPal, its parent has let it grow. And it’s done that: Venmo grew 50% in the second quarter to nearly 90 million accounts. Not bad for a free gift with purchase.— Owen Thomas (email | twitter)
As the debate rages on over whether we are in an economic slowdown, recession or “vibecession,” one thing has been pretty clear: "Across the board, consumers are feeling worse off than they were last year," said Charlotte Principato, financial services analyst at Morning Consult.
And that sentiment affects the financial products people are interested in using, as detailed in Morning Consult’s recent “State of Consumer Banking & Payments” report, based on monthly surveys of more than 2,000 consumers.
People are more likely to say they’re concerned about running out of money, or not attaining the lifestyle they want because of money.
Investing is getting cut out. Especially by young adults. The number of Millennials who say they have at least one savings product fell from 70% in July 2021 to 57% this June; just 49% of Gen Z adults have at least one investment product, compared to 60% last year.
Younger consumers are still buying now, paying later. Just under 40% of Gen Z adults and 30% of Millennials surveyed by Morning Consult used “buy now, pay later” to make at least one purchase in the past month as of June.
People are staying the course with their bank. The number of people who told Morning Consult they were interested in adding a new banking provider dropped by 39% in June compared to last year. "People are focused on not rocking the boat anymore than it already is being rocked for them," Principato said. That could be bad news for neobanks already struggling to find profits.— Ryan Deffenbaugh (email | twitter)
How cybercrime is going small time: Cybercrime is often thought of on a relatively large scale. Massive breaches lead to painful financial losses, bankrupting companies and causing untold embarrassment, splashed across the front pages of news websites worldwide.
The CFPB says Block is slowing down its Cash App investigation. The Consumer Financial Protection Bureau asked a federal judge to force Block to hand over documents it requested last year about Cash App’s handling of complaints and disputes. Block said it was “disappointed” by the agency’s move.
Stripe laid off between 45 to 55 employees at TaxJar, according to TechCrunch. Stripe acquired the tax-compliance startup last year.
The U.S. bankruptcy trustee for Celsius Network is seeking the appointment of an examiner. “There is no real understanding among customers, parties in interest, and the public as to the type or actual value of crypto held by the Debtors or where it is held,” the trustee said in a court filing.
Mortgage lenders are in trouble. More of the mortgage market is controlled by nonbank lenders, including fintechs, and many of them are struggling to stay afloat as originations slow.
The FDIC said Friday that FTX and other crypto firms published misleading statements about deposit insurance. The agency sent a cease-and-desist in response to tweets by FTX.US president Brett Harrison that the FDIC said contained misrepresentations about deposit insurance. Shortly after the announcement, Harrison tweeted that he had deleted the post and "didn’t mean to mislead anyone, and we didn’t suggest that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance."
The FDIC sent similar letters to the websites Cryptonews.com, Cryptosec.info, SmartAsset.com and FDICcrypto.com alleging the sites made misleading statements about crypto products having deposit insurance. The letters are part of a crackdown the FDIC promised after it sent a cease-and-desist letter about FDIC insurance claims to Voyager.— Ryan Deffenbaugh (email | twitter)
FinVolution Group is expected to report earnings today. Analysts don’t have an estimate for EPS, but it was $0.34 for the same quarter last year.
The Mobile Payment Conference is happening today through Wednesday in Atlanta. The conference is focused on education and networking for people who work in mobile payments and digital technology.
Intuit will report earnings Tuesday. The consensus EPS forecast, according to Zacks Investment Research, is $0.03 for the quarter. It was $1.28 for the same quarter last year.
Fintech DevCon takes place this Tuesday through Thursday in Denver. Speakers include fintech adviser Lou Anne Alexander, TrueML’s Laura Marino, and Mike Bifulco of Stripe.
The LatAm Fintech Summit takes place Wednesday and Thursday in Mexico City. The 14th annual event examines Latin American fintech, as financial inclusion and education for the region’s young, underbanked, growing populations become big drivers for the industry.
Affirm will report earnings Thursday. The consensus EPS forecast, according to Zacks Investment Research, is $-0.45. It was $-0.48 for the same quarter last year.
The Fintech Growth Summit is this Thursday and Friday in Miami. The “intimate” event spans topics from fraud and risk management to NFT use cases.
How cybercrime is going small time: People have been swindled since before man created monetary systems. These aren’t new crimes; just new ways to commit them. But as cybercrime increasingly goes small-time, those on the front lines will need new and more effective ways to fight it.
Thanks for reading — see you tomorrow!