Fintech

Em Conversa: Integration of regional payments with Yuno

Published

7 months ago

18 June, 2024

As of April 2023, there were 1,000 active fintechs in Latin America (LatAm), the vast majority of which were focused on financial inclusion, addressing the problem of 70% of the population lacking access to formal financial services. Em Conversa looks to find out what the future of fintech could look like in the region, following a $2.1 billion valuation in 2022.

In Brazil, nearly two-thirds of the population trust fintechs (57%), as many of them have addressed traditional problems faced by the country, such as access to finance. However, even more can be done. We met to explain how payments can be further digitized and democratized Juan Pablo Ortegaco-founder and CEO of Yuno.

Can you tell me more about the company and your role within it?

Juan Pablo Ortega, co-founder and CEO of Yuno

I am the co-founder and CEO of Yunoa global payments orchestrator with a mission to democratize financial transactions by helping businesses more easily navigate the complex payments landscape across geographies.

Our platform aggregates over 300 different payment methods worldwide, allowing businesses to easily select and integrate the ones most relevant to them in just a few clicks and manage them in one easy-to-use interface. We also provide anti-fraud, intelligent routing and one-click checkout tools, which help businesses save time, reduce costs and gain the ability to focus on their core business.

Our unique intelligent routing system is an essential feature because it allows us to significantly improve businesses’ payment approval rates. Automatically redirects failed payments through a new payment path, using artificial intelligence to optimize those with the highest approval rating, lowest costs and best user experience.

Founded in Bogota, Colombia, Yuno now operates in 60 countries to serve a global customer base, including McDonald’s, Avianca, inDriveand other companies in hospitality, retail, mobility and other industries.

What are the payments trends we are seeing in Brazil?

Brazil is an extremely interesting market that has seen huge changes in recent years. We’re proud to be at the forefront of the country’s exciting and transformative digital payments revolution, helping to simplify and democratize payment transactions for businesses of all sizes.

Brazil’s digitalization and economic diversification have accelerated the expansion of a growing middle class and fueled the shift from cash-based transactions to digital payments, helping to foster a thriving e-commerce ecosystem. As many as Two-thirds of Brazilians are expected to shop online by 2027bringing the e-commerce market to an estimated value of $125.68 billion by 2029.

Digital financial services, including mobile wallets and neobanksare revolutionizing payment habits, particularly among the unbanked population, while initiatives such as the BR code (the local QR code that standardizes the execution of payments) and open banking system they are improving the security and privacy of payments.

The introduction of Pix in 2020, operated by Central Bank of Brazil Providing instant payments and zero transaction fees for peer-to-peer transfers has had a significant impact on the payments landscape. Pix, one of the payment methods supported by Yuno, now surpasses credit and debit cards as the preferred payment method in the country, with approximately 80% of Brazilian adults use it in their daily life.

Other alternative payment methods such as Nupay, developed by Nubank for international purchases, and digital wallets like PicPay have become equally popular.

What is Yuno doing to improve the payments industry in Brazil and Latin America?

We’re working to support this thriving ecosystem by enabling businesses to more easily integrate a wide variety of regional payment methods without having to have large numbers of IT and payments experts on staff. In doing so, we hope to support financial inclusion by helping businesses of all sizes meet customer preferences, allowing them to focus on managing and growing their core businesses.

As digital payments expand their reach and popularity and cross-border transactions become more frequent, efficient and intelligent orchestration will become increasingly vital. It ensures that every payment option is represented, even as merchants benefit from lower costs of running their businesses and greater reliability and security of their payment transactions.

How does the Brazilian payments sector compare to that of the rest of the world?

The Brazilian payments industry is one of the most technologically advanced and fastest growing in the world. The introduction of the Pix instant payments system has been one of the main drivers of this progress, playing a fundamental role in the financial inclusion of millions of Brazilians and garnering over 160 million users since its launch just three years ago.

This success is now attracting attention in Latin America and beyond. Brazil’s central bank is now exploring deals to connect Pix with platforms in other geographies, with Italy being the latest country to show interest in a bilateral deal.

Looking more generally at the technology ecosystem in Brazil, the Central Bank has adopted regulations that, in most cases, facilitate the operation of fintechs, fueling innovation. The town is now home to the largest number of fintechs of all Latin American countries, with several indigenous startups such as Nubank, Calculation AND PagSeguro having achieved unicorn status, and 57% of Brazilians will express confidence in fintech in 2023.

What are some unique challenges associated with the region/country in the payments space?

Historically, navigating the regional payments ecosystem has been incredibly challenging and expensive for businesses of all sizes. Businesses looking to streamline their payment processes, introduce anti-fraud tools and reduce transaction costs have had to turn to multiple service providers individually, taking up valuable employee time.

We at Yuno have sought to resolve these inefficiencies by creating a single, easy-to-use platform through which businesses can manage and optimize all their payments in one place and ensure transactions are secure.

Focusing on more specific pain points, fraud has been a particular challenge in the Brazilian and regional payments industry. Total fraud in Brazilian retail is expected to exceed R$87 billion by 2024, an increase of 13% compared to 2023, with forecasts suggesting this number could exceed R$99 billion by 2025. anti-fraud mechanisms in our platform, allowing businesses to conduct transactions with confidence, given this increased security.

Access to consumer credit, although improved, represents another challenge. Although 58% of Latinos own a credit card, only 30% have access to other forms of credit, such as loans, insurance or investment products. Steps are being taken to address this issue, but there is still considerable potential for further innovation to improve access to credit and stimulate regional consumption.

Projects for the future (roadmap and growth plan)

Our current focus is to serve our customers well as we expand our reach into Europe, Asia and Africa. We see huge potential in these regions and great scope for Yuno to help businesses more easily navigate local payments ecosystems as we have done across Latin America.

Most recently, we announced our launch in Singapore, Hong Kong, Thailand and the Philippines, as well as our appointment to Jonathan Sala as Yuno’s head of APAC to oversee our regional expansion. Hall brings with him a wealth of experience from his previous roles Quick, PayPalAND Hyperportfoliowhich we are excited to leverage as we work to bring Yuno to more customers.

Francis Bignell
Francis is a journalist and our chief Latin America correspondent, with a degree in Classical Civilizations, has a specialist interest in North and South America.

Source

Fintech

US Agencies Request Information on Bank-Fintech Dealings

Published

6 months ago

30 July, 2024

FinCrypt Staff

Federal banking regulators have issued a statement reminding banks of the potential risks associated with third-party arrangements to provide bank deposit products and services.

The agencies support responsible innovation and banks that engage in these arrangements in a safe and fair manner and in compliance with applicable law. While these arrangements may offer benefits, supervisory experience has identified a number of safety and soundness, compliance, and consumer concerns with the management of these arrangements. The statement details potential risks and provides examples of effective risk management practices for these arrangements. Additionally, the statement reminds banks of existing legal requirements, guidance, and related resources and provides insights that the agencies have gained through their oversight. The statement does not establish new supervisory expectations.

Separately, the agencies requested additional information on a broad range of arrangements between banks and fintechs, including for deposit, payment, and lending products and services. The agencies are seeking input on the nature and implications of arrangements between banks and fintechs and effective risk management practices.

The agencies are considering whether to take additional steps to ensure that banks effectively manage the risks associated with these different types of arrangements.

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Fintech

What changes in financial regulation have impacted the development of financial technology?

Published

6 months ago

30 July, 2024

FinCrypt Staff

Exploring the complex landscape of global financial regulation, we gather insights from leading fintech leaders, including CEOs and finance experts. From the game-changing impact of PSD2 to the significant role of GDPR in data security, explore the four key regulatory changes that have reshaped fintech development, answering the question: “What changes in financial regulation have impacted fintech development?”

PSD2 revolutionizes access to financial technology
GDPR Improves Fintech Data Privacy
Regulatory Sandboxes Drive Fintech Innovation
GDPR Impacts Fintech Data Security

PSD2 revolutionizes access to financial technology

When it comes to regulatory impact on fintech development, nothing comes close to PSD2. This EU regulation has created a new level playing field for market players of all sizes, from fintech startups to established banks. It has had a ripple effect on other markets around the world, inspiring similar regulatory frameworks and driving global innovation in fintech.

The Payment Services Directive (PSD2), the EU law in force since 2018, has revolutionized the fintech industry by requiring banks to provide third-party payment providers (TPPs) with access to payment services and customer account information via open APIs. This has democratized access to financial data, fostering the development of personalized financial instruments and seamless payment solutions. Advanced security measures such as Strong Customer Authentication (SCA) have increased consumer trust, pushing both fintech companies and traditional banks to innovate and collaborate more effectively, resulting in a dynamic and consumer-friendly financial ecosystem.

The impact of PSD2 has extended beyond the EU, inspiring similar regulations around the world. Countries such as the UK, Australia and Canada have launched their own open banking initiatives, spurred by the benefits seen in the EU. PSD2 has highlighted the benefits of open banking, also prompting US financial institutions and fintech companies to explore similar initiatives voluntarily.

This has led to a global wave of fintech innovation, with financial institutions and fintech companies offering more integrated, personalized and secure services. The EU’s leadership in open banking through PSD2 has set a global standard, promoting regulatory harmonization and fostering an interconnected and innovative global financial ecosystem.

Looking ahead, the EU’s PSD3 proposals and Financial Data Access (FIDA) regulations promise to further advance open banking. PSD3 aims to refine and build on PSD2, with a focus on improving transaction security, fraud prevention, and integration between banks and TPPs. FIDA will expand data sharing beyond payment accounts to include areas such as insurance and investments, paving the way for more comprehensive financial products and services.

These developments are set to further enhance connectivity, efficiency and innovation in financial services, cementing open banking as a key component of the global financial infrastructure.

Sebastian Malczyk

General Manager, Technology and Product Consultant Fintech, Insurtech, Miquido

GDPR Improves Fintech Data Privacy

Privacy and data protection have been taken to another level by the General Data Protection Regulation (GDPR), forcing fintech companies to tighten their data management. In compliance with the GDPR, organizations must ensure that personal data is processed fairly, transparently, and securely.

This has led to increased innovation in fintech towards technologies such as encryption and anonymization for data protection. GDPR was described as a top priority in the data protection strategies of 92% of US-based companies surveyed by PwC.

Arid Islam

Financial Expert, Sterlinx Global

Regulatory Sandboxes Drive Fintech Innovation

Since the UK’s Financial Conduct Authority (FCA) pioneered sandbox regulatory frameworks in 2016 to enable fintech startups to explore new products and services, similar frameworks have been introduced in other countries.

This has reduced the “crippling effect on innovation” caused by a “one size fits all” regulatory approach, which would also require machines to be built to complete regulatory compliance before any testing. Successful applications within sandboxes give regulators the confidence to move forward and address gaps in laws, regulations, or supervisory approaches. This has led to widespread adoption of new technologies and business models and helped channel private sector dynamism, while keeping consumers protected and imposing appropriate regulatory requirements.

George Blandford

Co-founder, UK Linkology

GDPR Impacts Fintech Data Security

A big change in financial regulations that has had a real impact on fintech is the 2018 EU General Data Protection Regulation (GDPR). I have seen how GDPR has pushed us to focus more on user privacy and data security.

GDPR means we have to handle personal data much more carefully. At Leverage, we have had to step up our game to meet these new rules. We have improved our data encryption and started doing regular security audits. It was a little tricky at first, but it has made our systems much more secure.

For example, we’ve added features that give users more control over their data, like simple consent tools and clear privacy notices. These changes have helped us comply with GDPR and made our customers feel more confident in how we handle their information.

I believe that GDPR has made fintech companies, including us at Leverage, more transparent and secure. It has helped build trust with our users, showing them that we take data protection seriously.

Dr. Rhett Stubbendeck

CEO & Co-Founder, Leverage Planning

Source

Fintech

M2P Fintech About to Raise $80M

Published

6 months ago

30 July, 2024

FinCrypt Staff

Application Programming Interface (API) Infrastructure Platform M2P Financial Technology has reached the final round to raise $80 million, at a valuation of $900 million.

Specifically, M2P Fintech, formerly known as Yap, is closing a new funding round involving new and existing investors, according to entrackr.com. The India-based company, which last raised funding two and a half years ago, previously secured $56 million in a round led by Insight Partners, earning a post-money valuation of $650 million.

A source indicated that M2P Fintech is ready to raise $80 million in this new funding round, led by a new investor. Existing backers, including Insight Partners, are also expected to participate. The new funding is expected to go toward enhancing the company’s technology infrastructure and driving growth in domestic and international markets.

What does M2P Fintech do?

M2P Fintech’s API platform enables businesses to provide branded financial services through partnerships with fintech companies while maintaining regulatory compliance. In addition to its operations in India, the company is active in Nepal, UAE, Australia, New Zealand, Philippines, Bahrain, Egypt, and many other countries.

Another source revealed that M2P Fintech’s valuation in this funding round is expected to be between USD 880 million and USD 900 million (post-money). The company has reportedly received a term sheet and the deal is expected to be publicly announced soon. The Tiger Global-backed company has acquired six companies to date, including Goals101, Syntizen, and BSG ITSOFT, to enhance its service offerings.

According to TheKredible, Beenext is the company’s largest shareholder with over 13% ownership, while the co-founders collectively own 34% of the company. Although M2P Fintech has yet to release its FY24 financials, it has reported a significant increase in operating revenue. However, this growth has also been accompanied by a substantial increase in losses.

Source

Fintech

Scottish financial technology firm Aveni secures £11m to expand AI offering

Published

6 months ago

30 July, 2024

FinCrypt Staff

Aveni, Investment Management, AI, NLP, UK

By Gloria Methri

Today

To come
Aveni Assistance
Aveni Detection

Artificial intelligence Financial Technology Aveni has announced one of the largest Series A investments in a Scottish company this year, amounting to £11 million. The investment is led by Puma Private Equity with participation from Par Equity, Lloyds Banking Group and Nationwide.

Aveni combines AI expertise with extensive financial services experience to create large language models (LLMs) and AI products designed specifically for the financial services industry. It is trusted by some of the UK’s leading financial services firms. It has seen significant business growth over the past two years through its conformity and productivity solutions, Aveni Detect and Aveni Assist.

This investment will enable Aveni to build on the success of its existing products, further consolidate its presence in the sector and introduce advanced technologies through FinLLM, a large-scale language model specifically for financial services.

FinLLM is being developed in partnership with new investors Lloyds Banking Group and Nationwide. It is a large, industry-aligned language model that aims to set the standard for transparent, responsible and ethical adoption of generative AI in UK financial services.

Following the investment, the team developing the FinLLM will be based at the Edinburgh Futures Institute, in a state-of-the-art facility.

Joseph Twigg, CEO of Aveniexplained, “The financial services industry doesn’t need AI models that can quote Shakespeare; it needs AI models that deliver transparency, trust, and most importantly, fairness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, and reviewed by financial services experts for specific financial services use cases. Generative AI is the most significant technological evolution of our generation, and we are in the early stages of adoption. This represents a significant opportunity for Aveni and our partners. The goal with FinLLM is to set a new standard for the controlled, responsible, and ethical adoption of generative AI, outperforming all other generic models in our select financial services use cases.”