The Monday Roundup: what we are watching this week | April 24th

By Puja Sharma

The Monday Roundup sets the scene for the week’s biggest news stories, industry deals, and upcoming events. For Prime subscribers only.

FinTech partnerships–hits and misses

Goldman Sachs considers selling BNPL unit GreenSky. The US-based investment banking firm is exploring the sale of its recently acquired GreenSky fintech unit, as reported by a media firm. Goldman acquired GreenSky, a fintech lender and Buy Now, Pay Later provider, in September 2021 in a $2.24 billion deal to integrate the platform into its Marcus banking app.

Goldman Sachs merged Marcus into its wider asset and wealth management division in October 2022 as it shifted its focus away from retail banking. The bank’s CEO David Solomon told analysts this week that despite GreenSky performing well, “given our current strategic priorities, however, we may not be the best long-term holder of this business”.

After disappointing results from a division within the bank designed to diversify its business, the Wall Street titan decided to focus on its core offerings of trading, investment banking, and wealth management.

Worldline partners with Crédit Agricole to set up a joint payment company in France. The joint venture is expected to be operational by 2025 and will leverage Crédit Agricole’s merchant acquiring footprint, distribution network and knowledge of the French market as well as Worldline’s tech and global infrastructure capabilities across in-store and online payments.

Worldline’s CEO Gilles Grapinet said in a statement the partnership represents a “unique opportunity” for Playtech to expand its footprint and scale within continental Europe’s largest acquiring market, worth around €700 billion in merchant sales value.

“Structured primarily as a contribution in kind of our respective technological capabilities, commercial footprint and distribution capabilities to a joint company, this major contemplated transaction fully preserves our balance sheet and financial and strategic flexibility,” Grapinet adds.

Cash still constitutes 40% of payment volumes in France, and the two firms believe this represents an “attractive growth opportunity”.

Regulatory uncertainty

SME Finance secured €100 million credit facility from London-based Fasanara Capital. SME Finance CEO Mindaugas Mikalajūnas said, the new credit facility extension “will help us greatly in making finance accessible for every business”. The latest funding brings the total commitment from Fasanara to €240 million.

“We believe strongly that this sector is one of the cornerstones of our economy, and there is a lot of demand right now for finance partners that speak the language of a small- and medium-sized business,” Mikalajūnas adds.

SME Finance is now closer to its goal of establishing an EU-wide fintech marketplace where businesses can access business loans, revenue-based financing and embedded finance solutions, among others.

Fasanara Capital CEO Francesco Filia said, “This market has huge potential, with a highly-skilled labour force and innovative niches.”

The start-up has already disbursed more than €1.3 billion in loan volume and invoice financing to more than 2,500 businesses. Established in Vilnius, Lithuania in 2016, SME Finance utilises AI, open banking and automation in its loan decision-making, financing and customer onboarding to shorten and simplify the process.

⚖️New York-based FinTech Paxos, a blockchain infrastructure platform, is to withdraw from Canada citing regulatory uncertainty. Customer accounts without funds will be closed on 9 May, while from 2 June customers will no longer be able to transact from their Paxos account, aside from withdrawing funds.

In a statement, Paxos said, “Paxos will continue to assess its readiness to re-enter the Canadian market in cooperation with the Ontario Securities Commission (OSC) at a future date.”

In February, the Canadian Securities Administrators (CSA), which regulates Canada’s capital markets, laid out the investor protections it expects from cryptocurrency trading platforms operating in the country.

The CSA says crypto exchanges must have enhanced protections for the custody and segregation of crypto assets for Canadian clients and are prohibited from offering margin, credit or other forms of leverage.

What is the buzz

Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, has signed a strategic collaboration agreement with Mastercard that aims to drive digital transformation through partnerships with innovative FinTech companies.

The partnership between DIFC and Mastercard will provide FinTech start-ups and established companies with access to Mastercard’s network and expertise, as well as DIFC’s world-class financial ecosystem. The collaboration will focus on creating new payment solutions and digital services, as well as enhancing existing ones.

“At Mastercard, we are committed to driving innovation through collaboration between different players in the financial ecosystem. The collaboration between FinTech companies and established players would enable us to drive digital transformation. We are delighted to participate in DIFC’s programmes to accelerate innovation in the financial technology sector to boost the country’s digital economy,” said Amnah Ajmal, Executive Vice President, Market Development, EEMEA, Mastercard.