“I think what’s going to happen now is that VCs and investors are going to realise that if tech entrepreneurs don’t have a positive impact, you run the risk of talent leaving you, consumers leaving you, investors leaving you, governments regulating you and governments taxing you.”

Sir Ronald Cohen, “The Father Of British Venture Capital”

In the news last week:

Visa provides merchants with access to partners. With 3.3bn cards accepted at 46mn merchants worldwide, Visa has a huge platform to be exploited. Their Fintech Partner Connect offers a suite of capabilities combining the company’s own capabilities with those of selected FinTech partners, and you can see the full list in Visa’s press release.

The path followed by Visa is distinctly different to what we have seen elsewhere. FinTechs typically start up and grow via different avenues, their long-term survival being guaranteed either by maintaining market share, or acquisition. There is today a rather rich landscape of FinTechs providing groups of similar services, seeing themselves as challenging the incumbents. They differ quite subtly their services, and many stay independent for quite a few years, leading any rational observer to wonder how long such a market can survive.

What Visa is doing is selecting its partners and being the portal to them, thereby ensuring at least their ideological independence. Being the integrator has its advantages, and owning the technology is no prerequisite for success. Just think about Uber, AirBnB, eBooking and others who do not own the assets they make money from. The number of FinTech users is growing, judging by the number of App downloads.

Our view is that Visa’s move is a smart one because it creates a self-contained easy-access market for Visa users. However, the long-term risk of failure of this initiative is precisely due to the limited amount of partners, their quality of service, and the alternatives open to customers outside of Visa. Integration is one thing, lock-in is another, and if Visa cares about it customers, it won’t attempt the second one. Time will tell.

• Beware the Finfluencers.
• Inheriting a team.
• Incompetence at work is not an illusion.

Find out more about what we do, and read our previous newsletters and insights.

FinTech

• ApplePay becomes a necessary payment option.
• Pay your instalment or Google locks your phone.
• Norway sees no rush to replace cash.
• Here are 40 financial innovation labs.
• Experian widens the door for credit score improvement.
• China appears to be afraid of FinTechs, and is acting on it.
• Traditional borrowers versus FinTech borrowers.

Technology

• Here’s a list of French start-ups that might interest you.
• Uber allows ride reservation.
• Finland is edging closer to the first quantum computer.
• NASA now involved in commercial space initiatives.
• Zoom caught red-handed mis-selling its “encrypted” software.
• Google storage no longer free.
• Honda to start mass-producing autonomous cars in March 2021.
• Microsoft alleges vaccine hacking by Russia and North Korea.

FAMGA and more

• European challengers to Elon Musk.
• macOS BigSur is a step-change for Apple.
• Amazon faces lawsuit alleging failure to provide personal protective equipment to its workers.

Mergers, acquisitions

• French FinTech trends during the pandemic. [In French].
• How FinTechs can continue to grow in a crisis.

• Ever heard of Unconventional Capital?
• Aidexa raises €45mn to serve Italian SMEs.
• Autonomous delivery Nuro secures $500mn, valued at $5bn.
• AI endpoint security firm SentinelOne raises $267mn, valued at $3.1bn.
• Acquirer of high-performing Amazon businesses raises $65mn.
• Digital identity verification firm JV Veridas receives €4mn from BBVA and partner.
• A few words from the Father of British Venture Capital.
• Banking-as-a-Service provider Railsbank secures $37mn.