Daily Review: Integrations, Pan-European Consolidations & Meaningful Partnerships – The Visa Lesson

Partnerships are not just a fast track to success in FinTech. Banks have also come to realize the tangible benefits of partnerships. Studies suggest that 87% of banks that have partnered with third-party financial service providers (FinTech companies) have been able to cut costs. Additionally, 54% of partnerships increased revenue, Forbes cites.

What started as a BankAmericard program in Fresno, Calif., grew into the Visa we know now, which operates in more than 200 countries and territories with products and services available on any device – cards, laptops, tablets, and mobile devices. Visa played a unifying role for the financial institutions around the world, instead of remaining one of many localized connecting tissues for groups of institutions.

The largest FinTech startups are repeating the history of Visa, whether they want/realize it or not. Silicon Valley is the Wall Street of 2017, and to expect it to remain in infancy (under which we understand disjoint experiences and proprietary islands) would mean to misunderstand the importance of scale and convenience when it comes to delivering and consuming financial services.

Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off. – Franklin D. Roosevelt

Pick #1. TransferWise Partners with France’s Second-Largest Bank BPCE Groupe

TransferWise is adding a significant banking partner: BPCE Groupe, France’s second-largest bank. The partnership will see TransferWise provide international money transfer services for BPCE Groupe’s 15 million customers, which is the first time a major bank in Europe will directly integrate TransferWise’s API into its mobile banking apps.

TransferWise’s existing bank partnerships are with Estonia’s LHV and German challenger bank N26. It was due to add UK challenger bank Starling to the list, but the integration with the bank’s app never materialized, and last week, that partnership dissolved entirely.

The partnership between Groupe BPCE/Natixis Payments and TransferWise will launch at the beginning of 2019 when the bank’s customers will be able to send money outside of the eurozone at TransferWise’s standard fees via the banks’ app.

The original target for the company’s consumer and business money transfer app was incumbent banks who typically charge high fees for international money transfers and aren’t always transparent about the way they mark up the underlying exchange rate. And more recently, it has launched its Borderless account, a multi-currency banking product that includes a debit card and lets you deposit, send, and spend money. However, TransferWise Co-founder & Chairman Taavet Hinrikus has always insisted that the Borderless account is designed to work as a companion product to your main current account and not a full-fledged bank replacement.

Read more on TC.

Pick #2. Visa Announces Fast-Track Access to Its Network and $100 Million Investment for European FinTechs

Visa announced two new programs designed to support European FinTechs who are developing the next generation of digital payment solutions. Starting in July, FinTech startups based in Europe can onboard to Visa’s global network in as little as four weeks. The new FinTech fast-track program provides rapid onboarding and reduced fees to help early-stage startups gain access to the capabilities that lie within Visa’s global network to power their own ideas.

Additionally, Visa has launched a $100 million European investment program to support the FinTech ecosystem in Europe and grow its investment activity in startups.

Read more on Yahoo Finance.

Pick #3. Mastercard Is Looking to Integrate Its Payment Tech into Google and Amazon Voice Assistants

Mastercard is looking at ways to integrate its payments system into voice assistants made by Google and Amazon to let people pay by talking to a device. Mastercard has a product called Masterpass that allows a user to upload credit card details and acts as an easy way to pay for things online. Recently, the company launched a facility for people to pay with Masterpass for products within Facebook Messenger.

We’re looking at all of these technologies and we’re thinking about how they link on the Mastercard network. – Ann Cairns, vice chairman at Mastercard

Masterpass can be used to pay for apps on the Google Play store, on Amazon and Google. Cairns said any integration into voice assistants would be an extension of the relationship between Mastercard and the technology firms.

Mastercard is watching for ways to adapt to the shifts in consumer behavior when it comes to payments. Masterpass was the company’s answer to products such as Apple Pay. A number of technology firms are increasingly dipping their toes into financial services and Mastercard is trying to stay ahead through some of these technology products.

Read more on CNBC.

Pick #4. Citi Launches Global Currency Account for International Travellers and Investors

Citi launched the Global Currency Account, which allows customers to use up to 10 global currencies through a single bank account with the linked debit card. The Global Currency Account allows customers to easily access foreign exchange rates and send or receive money in currencies including the Aussie Dollar, US Dollar, British Pound, Euro, Canadian Dollar, Hong Kong Dollar, Japanese Yen, New Zealand Dollar, Singapore Dollar, and the Swiss Franc. Foreign exchange through the account is done in real time, so users will always know the exchange rate on offer when they’re using their cash. There are also no local ATM fees, or International Money Transfer fees attached to the account or debit card.

According to Citi, two years ago, investment customers’ assets had a 36% international and 64% domestic split. That trend has reversed to a 61% international and 39% domestic investment ratio. Citi’s Wealth Management customers can access the account fee-free, while other customers looking to use the Global Currency Account will need to pay an $8 monthly fee.

Read more on Mozo.

Pick #5. UniCredit Seeks Merger with SocGen

Italy’s UniCredit is plotting to merge with French rival Société Générale in a bold move that would see two of Europe’s big banks join forces, leading the way for an expected round of banking mergers on the continent.

For SocGen, one of the main benefits would be gaining a leading position in Italy and Germany, both in retail and corporate banking. But any UniCredit-SocGen deal would be fraught with difficulty. Aside from Italy’s political turbulence – and hostility to foreigners owning or running Italian businesses – regulators may be unnerved by the combination of two lenders already deemed systemically important.

A merger between the two has been considered by SocGen on several occasions over the past 15 years and in recent months by senior executives. However, the bank on Sunday denied any board discussion regarding a potential merger with UniCredit. UniCredit declined to comment.

Europe’s banks are under increasing pressure to bulk up, due to their relative decline compared with booming US rivals.

The European Central Bank has signaled it would like to see cross-border deals as part of efforts to champion the pan-eurozone banking union.

Read more on FT.