Stay up to date with the latest news from fintech! This week, we bring you updates on regulations, legislation, partnerships, and more. Enjoy reading!
JD.com to launch industrial version of ChatGPT (The Payper)
China-based ecommerce platform JD.com has announced that it will launch an industrial version of ChatGPT dubbed ChatJD on JD Cloud’s artificial intelligence application platform, Yanxi. Based on details provided in the announcement, the platform is set to integrate past industrial practice and technology accumulation, with the company having announced ChatJD’s landing application roadmap “125” plan, with the power of industrial AI, to accelerate AI technology implementation and development in China, and promote the development of the real economy. Read more
FIS to spin off Worldpay merchant services business acquired in 2019 (The Payper)
Global financial technology provider FIS has planned to undertake a tax-free spinoff of its merchant operations, the majority of which comes from Worldpay, as reported by Reuters. The Reuters report said FIS could announce the spinoff this week as the company reveals the outcome of a strategic review it conducted in 2022 under pressure from hedge funds. FIS launched the review in December 2022, as it underwent a change in leadership. The review reportedly involved a ‘comprehensive assessment’ of the company’s strategy, businesses, operations, and structure, with the goal of improving results, shareholder value, and client services. Read more
Commission launches European Regulatory Sandbox for Blockchain (European Commission)
The Commission launched the European Regulatory Sandbox for Blockchain. Sandboxes are controlled environments where companies can test their products and services while engaging with relevant regulators. This Sandbox will provide legal certainty for decentralised technology solutions including blockchain by identifying obstacles to their deployment from a legal and regulatory perspective and providing legal advice, regulatory experience and guidance in a safe and confidential environment. It should also allow regulators and supervisors to enhance their knowledge of cutting-edge blockchain technologies and share best practices through dialogues. Running from 2023 to 2026, the Sandbox will support 20 projects annually, including public sector use cases on the European Blockchain Services Infrastructure (EBSI) – a multi-country project under the Digital Decade supported by the Commission, all Member States, Norway and Liechtenstein. The first call will be open until 14 April 2023. Read more
New regulation to hit the BNPL market in Britain (The Payper)
Britain has planned to set out draft legislation to regulate Buy Now, Pay Later credit, saying the sector posed potential harm to consumers without strong affordability checks. BNPL companies are largely unregulated and typically offer on-the-spot interest-free short-term loans that spread payments for retail goods like clothing. The sector nearly quadrupled during the COVID-19 pandemic in 2020 to GBP 2.7 billion (USD 3.28 billion), according to Reuters. With Britain facing a cost-of-living crisis, consumer groups worry cash-strapped people are getting into debt by using BNPL to buy food or pay energy bills. The finance ministry said it will launch a public consultation on 14 February 2023 on legislation to regulate BNPL, giving the Financial Conduct Authority (FCA) powers to authorise operators and their activities. It want people to be able to access affordable credit, but with clear protections in place. Read more
Solaris Setback Spells Trouble For European Fintech Scene (Forbes)
Solaris, the German Bank-as-a-Service (BaaS) provider, confirmed that it will face a “permission proviso” with the Germany regulator, BaFin. Implemented in December 2022 and announced in January 2023, the bank will need approval from the regulator before onboarding any new customers, a restriction that will likely impact its pan-European ambitions. The news confirmed what many European seed-stage fintechs looking for a banking partner have known for months; launching a digital finance product with the German BaaS is now nearly impossible. The BaFin’s decision to impose this restriction on Solaris comes after a banking supervisory audit by PwC that explored the bank’s operations in 2020. The decision followed similar limits set on N26 in 2021, and, more recently, C24 Bank. The BaFin appears to be cracking down on institutions with full banking licenses due to concerns about “proper business organization.” Post-Wirecard, it is clear that the BaFin is operating with extreme caution. Read more
NatWest Group snaps up UK fintech Cushon for £144m (Fintech Futures)
NatWest Group is set to acquire an 85% stake in UK-based workplace savings and pensions fintech Cushon in a deal worth £144 million. The acquisition will enable NatWest to offer its commercial customers and their employees a new suite of financial wellbeing products as the bank looks to “help meet customers’ changing needs at every stage of their lives and support greater financial resilience”. Cushon, whose stated mission is “to lead a tech-revolution of UK pensions” whilst having “a positive impact on society”, offers pensions and savings products via a mobile app. Its Master Trust workplace pension offers an investment strategy built to drive down the financed carbon emissions of customers, with a focus on sustainability and social impact. The fintech also offers financial education services and one-to-one financial check-ups to employees. Read more
Wefunder’s equity crowdfunding platform has officially expanded to the EU (Tech Crunch)
After two years of seeking regulatory approval, Wefunder has officially received the green light to operate its investment crowdfunding services within the European Union. This marks Wefunder’s first time expanding outside of the United States, and according to CEO and founder Nick Tommarello, the business is the first U.S. investment platform to gain operational approval. “It would be complacency not to do this,” Tommarello said, noting expansion was tied to key policy changes that took away some of the thorny financing rules that impacted the region. Previously, Tommarello explained, crowdfunding platforms would have to gain approval from each and every country in the EU to operate there, as each followed a different set of regulations. Thanks to a law passed in 2021 by the European Union and the EEA, Wefunder can follow one set of laws that unifies the 30 countries into the same framework. Read more
Terra’s Do Kwon charged with fraud over $40bn crash (Business Cloud)
Do Kwon, co-founder of Terra, has been charged with fraud by the US Securities and Exchange Commission. South Korea police and Interpol are hunting a figure whose current whereabouts are unknown. The Terra ecosystem – which included the Luna cryptocurrency and algorithmic stablecoin TerraUSD (UST) – collapsed last year, leading to billions of losses for investors. Regulator the SEC accused Kwon of “perpetuating a fraudulent scheme that led to the loss of at least $40 billion of market value”. The suit added: “Terraform and Kwon also misled investors about one of the most important aspects of Terraform’s offering – the stability of UST, the algorithmic ‘stablecoin’ purportedly pegged to the US dollar. “UST’s price falling below its $1 ‘peg’ and not quickly being restored by the algorithm would spell doom for the entire Terraform ecosystem, given that UST and LUNA had no reserve of assets or any other backing.” When UST dropped 10 cents below $1, Kwon’s company Terraform Labs persuaded an unnamed US trading firm to buy UST to restore the peg, in exchange for Luna tokens. Read more
Zopa acquires DivideBuy in “BNPL 2.0” push (Fintech Futures)
UK fintech unicorn Zopa has made its first acquisition, snapping up e-commerce credit solutions provider DivideBuy as it looks to deliver “BNPL 2.0”. Financial details are undisclosed and the deal is set to be completed in the next few months. The move will enable Zopa users to spread the cost of larger purchases worth between £250 and £30,000. Zopa says its buy now, pay later (BNPL) offering will run credit checks and affordability assessments, share data with credit agencies, enable the creation of credit profiles and help customers structure and pay off their debt. It will also provide instant decisions and combine “fully integrated” consumer journeys with consumer protection and the safeguards of a regulated bank, Zopa says. Read more
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