The Weekly Wrap: all you need to know by Friday COB | Oct 22nd

By Gaia Lamperti

The Weekly Wrap is published every Friday and recaps the week’s main stories and deals, as well as upcoming events and announcements. For Prime subscribers only.

The Big Story

The UK Government has launched a 3-month consultation into the regulation of ‘Buy Now, Pay Later’ which could have implications for a number of FinTechs.

The BNPL segment is one of the fastest-growing in the sector and attracted huge deals during 2021, with growth among UK consumers that have quadruplicated the side of the market since 2020.

The HM Treasury consultation will close on 6th January 2022 and will explore areas of potential consumer detriment within BNPL offerings. “Alongside the step-change in the use of these products, there has been a rise in concerns about whether BNPL is giving rise to consumer detriment,” states the consultation announcement document. “Recognising the transformation in the use of this regulatory exemption, the government committed to introducing balanced and proportionate regulation of BNPL. This consultation seeks views to inform final decisions about the shape and form that such regulation should take.”

BNPL firms will be required to conduct background checks before lending to customers, making sure that they can afford the payments, and their users will have the ability to bring their complaints to the Financial Ombudsman Service, the UK’s authority that settles complaints between consumers and financial services.

Klarna, one of the most popular and highest-valuated BNPL companies, which has raised a total of $2.1 billion in funding, said it welcomed the move toward regulation. “Ultimately, this will drive consistency and improve outcomes for all consumers, especially as we see more traditional lenders entering the sector who, as we all know, have a long history of finding dirty tricks to keep their customers in debt by adding fees and charging high interest,” Klarna’s Co-founder and CEO, Sebastian Siemiatkowski commented.

“Buy Now, Pay Later can be a helpful way to manage your finances but it’s important that consumers are protected as these agreements become more popular,” John Glen, Economic Secretary to the Treasury, said in a statement this week. “By stepping in and regulating, we’re making sure people are treated fairly and only offered agreements they can afford – the same protections you’d expect with other loans.”

Deals of the Week

• Primer secures a $425 million valuation after Series B fundraise led by ICONIQ
• Pismo raises $108 million Series B led by SoftBank, Amazon and Accel to globally enable Cloud-Native financial services
• Proportunity raises over £100 million to support the UK homeownership dream
• XanPool secures $27 million to consolidate its presence in APAC
• Currencycloud partners with Plaid to deliver seamless payment solutions
• Argentina’s Pomelo raises $35 million in Series A round led by Tiger Global
• secures $10 million Seed round to disrupt card payment ecosystem

Be on the Lookout for

COP26! The UN conference will start on Oct 31st in Glasgow and will consist in two weeks of meetings focused on long-term solutions and immediate action to tackle the climate emergency and accelerate the goals set during the Paris Agreement.

Many businesses operating in the financial services industry have taken the matter to heart and are finding ways to engage with the international event by realigning their strategies to greener standards, releasing research and reports about the industry’s impact on climate change, and setting targets to reduce their own emissions.

“Decarbonising our economies to net-zero will undoubtedly involve a mindset change, habit change and technologies, some not yet invented, to scale,” commented Gerard Grech, CEO of Tech Nation, a leading network for tech entrepreneurs. “We know the considerable contribution scaling businesses can make to net-zero by tackling their own emissions and delivering new innovative net-zero technologies, so everyone can play their part in facilitating change and removing the barriers that prevent action.”

Events & Appointments

• Money 20/20 come back, this time in the US, in Las Vegas, between Oct 24t – 27^th. IBSi is Media Partner at this event, and we expect nothing less than the European version held in Amsterdam last month.
• CedarIBSi FinTech Lab is hosting another webinar on Oct 28^th focusing on ways to drive enterprise fraud management and AML in the digital era. The event is free and subscriptions are open – we hope to see you there!