PUBLISHED: 20 DECEMBER 2019 AUTHOR: FINTECH CIRCLE

Facebook digital currency Libra

One of the leading stories of the year was Facebooks proposed digital currency Libra announced this summer. World leaders and central bankers have since raised concerns over money laundering, data privacy and the privatisation of the money supply. Following the Cambridge Analytica scandal Facebook has had an uphill battle persuading regulators. While Mark Carney, the governor of the Bank of England has supported the idea of digital currencies he told the Commons Treasury committee that Libra should be heavily regulated worldwide “or it’s not going to happen”. Starting as a technology first project with a fail-fast-and-improve Silicon Valley approach and with 2 billion users, Facebook could strip nations of the control of their economies and threaten global financial stability. If Facebook have underestimated the opposition to Libra next year could be a decider for one of their biggest plays so far.

Fidelity National Information Services acquired Worldpay for $33.5 billion

The largest fintech deal not only this year but in history went to paytech and the acquisition of Worldpay by Fidelity National Information Services (FIS) who now own approximately 53% of the new company. The combination of stock and cash values the merger at about $33.5 billion. FIS serves financial institutions with transaction processing, digital channel solutions, fraud prevention tools, and card issuing services. Worldpay provides payment processing solutions to merchants. The new company will operate under Fidelity National’s name with Worldpay CEO Charles Drucker serving as the executive vice chairman. The management teams from the two companies stated that they will be able to find new revenue opportunities and cost synergies that they would not have been able to achieved separately.

Apple and Goldman credit card

Diversifying from device sales and building on a new consumer business after establishing an online Marcus brand, another story of Big Tech moving into finance has emerged with Apple and Goldman Sachs rolling out a virtual credit card in August. Apple said purchase information would be stored on the user’s iPhone and that it cannot see the data and Goldman will not be allowed to use data for marketing purposes. Apple will also offer a physical card but with no visible number. The card’s number is stored on the iPhone, which will generate virtual numbers for purchases that require a number. Some the first customers had no credit history or below-average credit scores. As of 30 September with the Apple Card Goldman has lent out about $10 billion and customers had $736 million in loan balances.

UK fintech investment at record high

London overtook New York as UK fintech investment hit a record high earlier this year in September according to new research by London & Partners, and Innovate Finance. In the first eight months over $2 billion has been invested in London based businesses with 114 deals overtaking totals seen in previous years. New York came second with 101, San Francisco third with 80, Singapore with 23 and Beijing with 24 deals. During this time out of the ten largest European investments London based companies accounted for half these deals, totalling $1.8bn. Charlotte Crosswell, CEO, Innovate Finance, said: “It’s no surprise London and the whole of the UK Fintech sector is experiencing record growth – we are home to world-class talent and our historical pedigree enables access to key global markets.”

Greensill raises $800m

The largest European fintech raises this year included Klarna’s $460m pushing their valuation up to $5.5bn and OakNorth’s $440 raise, one of the few profit making fintechs bringing in £34m last year. Surpassing all other European fintech raises this year was Greenshill a company that provides supply chain finance. Their investment from the Softbank Vision Fund brought their valuation up to £3bn.  Lex Greensill said: “Greensill democratises access to capital using technology and the financial markets. We are agents of technological disruption with a mission to make available finance at the lowest possible cost for our clients and their suppliers, whilst opening up a whole new asset class to global investors.”

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