0/ McKinsey is out w/ their '21 Global Payments Report. They highlight:
-The current landscape & trends in a post pandemic world
-CBDC & stablecoins
-Transaction banking & treasury services
-Merchant acquiring & the $100B SMB opportunity
1/ Payments revenue declined 5% YoY to $1.9T in '20 (the first decline in 11 years) compared to the 7% CAGR from '14-'19.
-Post '21 McKinsey projects a return to mid-single-digit growth rates with '25E revenue of ~$2.5T
2/ We saw an acceleration of cash to card, migration from in-store to online commerce, & adoption of instant payments & other new form factors.
-Cash payments were down 16% globally
-Tap to pay surged (e.g., in Australia +90% YoY)
-India registered 25.6B tx's in '20 (+70% YoY)
3/ Real-time payments are playing a more important role +41% in '20.
-56 countries now have active RTP rails; a 4x increase from 6 years ago
-Regional solutions are staking out ground b/w global networks (e.g., $V / $MA) vs. domestic incumbent schemes (e.g., EPI, SEPA, SCT)
4/ FedNow is expected to launch in '23
-Cross border payments remained a growth area even with travel & trade lower due to growth in areas like XB eComm +17% YoY
-Once XB non-ecom and trade goes back to trend should lead to upside for both $V & $MA
5/ Re: CBDC & stablecoins they say more than 4/5th of the world's CB's are engaged in pilots on CBDC activity.
-Concurrently private stablecoins have launched which now are in excess of ~$125B+ of circulating supply
-They quote $3T of 1H21 stablecoin transaction volume
6/ They highlight that some gov't view CBDC as a programmable money-vehicle for monetary & social policy that could restrict usage to basic necessities, specific locations or defined period of time.
-There is no agreed issuance model, agreed upon design for the entity holding
7/ CBDC accounts (e.g., some held directly at the CB, others at private sector banks, other have FI's running permissioned nodes, etc..)
-The current state of financial infra in a country will play a key role in determining the speed & extent of adoptions of CBDC, stablecoins...
8/ On Transaction Banking & treasury services
-Banks recognize the importance of being close to decisions around core underlying payments, investment, & financing flows that their corporate customers are making.
-Liquidity management tools (e.g., treasury management, cash
9/ forecasting, supply-chain finance (SCF)) are being embedded into the new generation of corporate global transaction banking portals
-Banks are clearly motivated to provide best in class support for commercial banking functions that generate $550B+ in annual revenue
10/ Banks face several strategic decisions on this front. -They must first determine their desired role in this evolving ecosystem: integrators & orchestrators of a full suite of services, background service providers, or developers of proprietary front ends built in-house
11/ The build-buy-partner decision remains relevant & we've seen more partnership within the treasury space (e.g., @ModernTreasury)
-Interviewing Treasurers of large corporates they highlight 5 primary needs:
12/ Finally on merchant acquiring they peg the SMB opportunity at $100B+ but talk about the evolving landscape, commoditization of core payment infrastructure & emphasis on value-added services.
-Merchants are increasingly willing to pay for
commerce-enablement services, such as
13/ loyalty programs, gift cards, & affiliate marketing.
-As the payments business becomes more embedded VAS will drive the growth
-Categories such as real estate, education, & professional services include significant numbers of SMBs expected to spend $100B+ by '25
14/ Serving SMB's acquirers will need to:
-Optimize the performance of ISV partners
-Target a broader share of merchants' expense wallets
-Focus on specific industries
-Develop solutions for platforms
15/ The convergence of CeFi / DeFi, RTP, and APM / form factors, growing trends of embedded payments, emphasis on value-added services, etc... with a $2.0T+ per year revenue pie, continues to make the payments end market one of the biggest jump balls for value accrual.

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More from @JohnStCapital

14 Oct
0/ Highlights from $JPM earnings re: tech / FinTech broadly

JPM "wants to continue to be nimble across both private & public cloud" Jamie Dimon said this is a 10 yr plan & they are trying to get their digital strategy right; if they ever go overseas in retail it will be digital.
1/ Some of their FinTech M&A activity is predicated on providing a "more integrated & holistic experience to their customers"

Dimon mentioned they are competing w/ some very large global players ""who are not even in banking today" & other M&A is around that compared to
2/ "traditional banking." Sounds like he has his eyes set on both Big Tech & growing FinTech players whom they continue to think operate w/ a regulatory arbitrage.

On BNPL they said "It is funny how layaway is back in the eComm checkout lane..but obviously we're looking at it.
Read 10 tweets
13 Oct
0/ @DriveWealth out with their 3Q21 retail trends report. 
-# of trades were +34% YoY
-Their avg trade size increased to $260 +4% QoQ 
-They saw approved accounts +14% QoQ, a 55% increase in AuM YoY, 95% of trades had a fractional component & 72% of new accounts opened by ppl <40
1/ Digital wallet account holders were 2x as likely to be active YTD vs self directed brokerage account holders
-The avg trades per account in 3Q21 for investors 30-39 was 10
-Despite higher trade activity volumes continue to trend lower vs. 1Q21 up slightly from 3Q20 levels
2/ On a regional basis:
-LatAm- the avg trade size increased 35% QoQ
-EMEA- investors have exhibited consistent activity trading at least 6 of the 9 months YTD
-APAC- place the largest $$ size trades compared to other regions, with avg trade size +3% QoQ
Read 11 tweets
12 Oct
0/ @cuysheffield had a great talk w/ @laurashin re: $V's role in crypto.

V is laser focused on their "network of networks" strategy & looked at this new class of FinTech in crypto wallets / exchanges with millions of users & billions of dollars in need of fiat on /off ramps.
1/ $V looks to serve as a bridge b/w crypto wallets, assets & their 70M+ merchants + 3.6B credentials. V's role is as an enabler; at the core it's a payment infrastructure co helping to originate & receive payments & blockchains are additional networks for their clients to use.
2/ They are working closely w/ regulators on stablecoins & CBDCs to ensure they operate in a safe way. But as opposed to focusing solely on the risks they are highlighting the numerous benefits / opportunities of what you can do w/ a stablecoin that you can't do w/ existing rails
Read 13 tweets
9 Oct
0/ A busy 3Q21 in the VC ecosystem per @CBinsights:
-848 total unicorns (127 added in 3Q or 15% QoQ) +58% YoY
-$158B in total funding +105% YoY
-409 $100M+ deals (5th straight ATH quarter)
-US market saw $72B or 46% of global funding
1/ The median valuation for a "late-stage" co is now $1.1B +110% vs $532M for '20
- 33% of new unicorns are in FinTech. Total FinTech funding in 3Q21 is $31B 161% YoY. YTD is $91.6B nearly 2x '20
-While Tiger takes the headlines, Sequoia China did 96 deals or 1.5 per business day
2/ Deal sizes are getting larger across the board. The average / median global deal size is now $25M / $4M vs. $9M / $2M 5 years ago.

This is dragged up by the $100M+ megarounds which saw a record $253B in funding & account for ~60% of total dollars invested globally.
Read 11 tweets
9 Oct
0/ When @iamjakestream asks for the S1 tear down...

@NerdWallet 's mission is to "provide clarity for all of life's financial decisions" & their vision is "a world where everyone makes financial decisions with confidence." Their platform reaches 21M Monthly Unique Users "MUUS"
1/ COVID-19 was a clear headwind for the business. They did $228M in revenue in '19 vs. $245.3M in '20 & $181.6M in 1H21 (vs. $137.3M in 1H20). After growing 32% in '19 they grew 7% in '20 (after a 64% YoY growth rate in 1Q20 pre-pandemic).
2/ During COVID CC revenue was (30%) YoY, while Loans & Other were +48% / +41% YoY. Starting to see a rebound in 1H21. They generate revenue predominantly via fees paid by financial service partners in the form of either revenue per action, revenue per click, revenue per lead, or
Read 10 tweets
8 Oct
0/ In case you missed the @chippercashapp event earlier this week great job by @HSerunjogi, @DrJid & the rest of the team.

Chipper is the largest P2P mobile money transfer platform in Africa with 4M+ users, & 40K onboarding every day accounting for 80K transactions/day.
1/ They rolled out a number of new product launches including:
-Fractional equities in Uganda (with @DriveWealth).
-Launched in South Africa w/ P2P payments & the ability to buy/sell crypto.
-Launched the core P2P payments in both Ghana & the US
2/ They now offer P2P payments, Chipper Card, Bill Pay, Airtime, the ability to invest in crypto & stocks, an open network API for developers to build on top of the Chipper network & Chipper Checkout enabling local & XB payments for businesses at any size.
Read 7 tweets

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