The Monetary Authority of Singapore (MAS) and state investment firm Temasek announced today that Project Ubin, its blockchain-based multi-currency payments network, has proven its commercial potential after tests with more than 40 companies.
The initiative was launched in 2016. A prototype developed by Temasek and J.P. Morgan began undergoing testing last year to see how well it would integrate with commercial blockchain applications.
A report released today, commissioned by MAS and Temasek, said Project Ubin’s prototype was validated through workshops with more than 40 financial and non-financial firms. Its potential uses include faster, less costly cross-border transactions; foreign currency exchange; and smart contracts for escrow and trade.
The report also said that Project Ubin’s prototype can potentially pave the way to enable more collaborations with central banks and other financial institution to build better cross-border payments networks.
In a statement, Chia Song Hwee, Temasek’s deputy chief executive officer, said “This validates Temasek’s efforts in exploring and building blockchain solutions focusing on digital identity, digital currencies and financial asset tokenization. We look forward to supporting commercialization efforts emanating from Project Ubin and other application areas, with a view to drive greater adoption of blockchain technology.”
We’re excited to announce that Extra Crunch is now available to readers in Argentina, Brazil and Mexico. That adds to our existing support in the U.S., Canada, UK, and select European countries.
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Latin America has always caught the eye of big tech. For companies like Facebook, Amazon, and Uber, Latin America has represented a massive growth opportunity. But it’s not just big tech that’s investing in Latin America. The startup scene is booming. According to Crunchbase, VCs invested billions into Latin America in 2018 and 2019.
In 2018, the TechCrunch team took a trip to Sao Paulo, Brazil to host Startup Battlefield Latin America. We knew about the hot startup scene and massive investments, and wanted to meet the founders fueling the fire in person.
The excitement, wit, creativity, and energy of the entrepreneurs in Latin America was impressive. We were dazzled by the pitches from budding startup teams, and we were enlightened by the investors sharing their wealth of knowledge about the ecosystem. What we saw in person helped us tie the funding to the faces of the teams building the future. The entrepreneurial mentality of Silicon Valley doesn’t have borders; it’s alive and well across Latin America.
We wanted to bring Extra Crunch to Latin America to help support the startups and investors in this market because community has always been our top priority. We hope that Extra Crunch’s deep analysis and company building resources will help the Latin America tech community grow even stronger than it is today.
We’ve been polling our audience about expanded country support for over a year now, and Argentina, Brazil and Mexico have always been near the top of the list. Now, we’re delivering on the promise to bring Extra Crunch to everyone that asked for it.
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We’re excited to announce that we’ve added Extra Crunch support in Ireland, Portugal and Greece. That adds to our existing support in Europe as we are already in Austria, Belgium, France, Germany, Italy, the Netherlands, Poland, Romania, Spain and the U.K.
Portugal’s 10 million citizens are no strangers to startup investment, with the country totting up 813 to date, according to Crunchbase. Notably, of that total, 113 have been announced in 2020 thus far.
That means that in 2020, despite COVID-19 and its ensuing economic impacts, Portugal is on track to best its 2019 startup round total of 206. And it’s not just small companies that Portugal is building. OutSystems, now based in Boston and worth north of $1 billion, was founded in the country, for example. As Europe recovers from COVID-19, perhaps Portugal can take a larger share of the continent’s startup activity. It appears to have the momentum it would need to do so.
There’s been data from the last few years to indicate that the Greek startup scene is also growing nicely. With larger seed deals and more deal volume, Greece has seen its startups raise more money, more quickly in recent years. It appears that 2020 is no exception to the trend. With 43 known startup rounds in the country so far in 2020, Greece is set to storm its 2019 total of 59. Indeed, the country could nearly double the number of startup deals it saw in 2019 during a pandemic-disrupted year.
In the past 18 months, the country has seen around 38% of its all-time total known startup deals. Surely that means the country is at a local maxima when it comes to startup activity.
Ireland is a startup powerhouse. Crunchbase has 2,327 known rounds for companies based in the country, including 539 in 2019 and 335 so far this year. So like our other two countries, we can spot acceleration in deal volume. Irish startups raised over $5 billion in 2020 so far, according to Crunchbase. There are going to be more names bubbling up from the island that are worth getting to know.
As a nation, Ireland has a history of startup successes. Software company FINEOS was founded in Ireland back in 1993, and today it’s a public company worth more than a billion dollars. Havok, another software company from the country sold to Microsoft in 2015. And Ireland has other neat tech startups that are still coming up, like Farmflo, to pick one from the list we made this morning.
We’re excited to welcome readers from Greece, Portugal and Ireland to our growing community of startups, investors and entrepreneurs.
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Salt Lake City’s Spiff has announced a $10 million round of funding to expand the sales and marketing efforts for its service that automates commission payments for sales people.
Some of the biggest names in startup tech are using the service to pay their sales force, including Brex, Workfront, Algolia and the publicly traded startup Qualys.
The idea at Spiff is to create a new software category around sales compensation management, and it’s gotten buy-in from investors at Norwest Venture Partners, Next World Ventures and Epic Ventures. Seed investors, including Kickstart Album Ventures, Pipeline Capital and Peterson Ventures, returned to invest in the company as well.
“Commissions are a major cause of anxiety for teams who don’t understand or trust their incentive plan and many waste hours every month correcting mistakes or arguing with finance, which hits bottom lines,” said Spiff chief executive, Jeron Paul. “Norwest’s investment will help us automate commission calculations so sales teams have one less thing to worry about in these challenging times.”
Paul, a serial entrepreneur whose most recent business, Capshare, was sold to Solium in 2018, has spent the better part of his professional career developing services businesses for enterprises.
“The world of sales compensation software is long overdue for a revamp,” said Sean Jacobsohn, partner at Norwest Venture Partners, in a statement. “With 85 percent of companies still calculating sales commissions manually in Google Sheets or Excel, I’m excited to partner with Spiff to help transform the way people think about sales compensation and provide sales teams with a deeper level of visibility into their commissions.”
For Amazon, it’s never too late to try something in India. The e-commerce giant is exploring ways to further spread its tentacles in the largely offline, technology-free neighborhood stores in one of its key overseas markets.
The American firm’s latest attempt is called “Smart Stores.” For this India-specific program, Amazon is providing physical stores with software to maintain a digital log of the inventory they have in the shop, and supplying them with a QR code.
When consumers walk to the store and scan this QR code with the Amazon app, they see everything the shop has to offer, as well as any discounts and past reviews from customers. They can select the items and pay for it using Amazon Pay. Amazon Pay in India supports a range of payments services including the popular UPI, and debit and credit cards.
Amazon told TechCrunch that it piloted this project two months ago and is formally launching it now after seeing the early feedback. More than 10,000 shops, ranging from mom and pop stores to big retail chains including Big Bazaar, MedPlus and More Supermarkets have deployed the company’s system, it said.
The company said these “digital storefronts” are a win-win for both consumers and shop owners. Consumers do not need to stay inside the store and worry about handling plastic cards or cash — that is, to maintain social distance — and they will also get rewards for using Amazon Pay.
Customers also get the ability to use Amazon’s Pay Later feature that enables them to pay for their purchases in installments. All of this means that merchants are seeing increased footfalls and improving their sales. Amazon said it is not taking any cut from merchants or customers.
The company has been aggressively engaging with physical stores in India in recent quarters, using their vast presence in the nation to expand its delivery network and warehouses and even just relying on their inventory to drive sales.
The company’s push in the physical retails, which accounts for the vast majority of sales in India, comes as Facebook, Flipkart, Google, and Reliance Jio Platforms, which recently raised $15.2 billion, also race to capture this market. On Thursday, Google said it plans to offer loans to merchants in India by the end of this year.
These mom-and-pop stores offer all kinds of items, are family-run and pay low wages and little to no rent. Since they are ubiquitous — there are more than 30 million neighborhood stores in India, according to industry estimates — no retail giant can offer a faster delivery. And on top of that, their economics are often better than most of their digital counterparts.
— Vijay Shekhar Sharma (@vijayshekhar) April 23, 2020
“Amazon Pay is already accepted at millions of local shops, we are trying to make customers’ buying experience at local shops even more convenient and safe through Smart Stores. Further, through EMIs, bank offers and rewards, we seek to make these purchases more affordable and rewarding for customers, and help increase sales for merchants.” said Mahendra Nerurkar, chief executive of Amazon Pay, in a statement.
Amazon’s tardy but increasingly growing interest in the Indian physical retails market is not surprising. The company has often taken longer than most firms in India to study the market and then adds its own spin to tackle those challenges. Another recent case in point: Its foray into food delivery market in India.
Despite ubiquitous interest in the physical retails market, one thing that that no company is talking about yet is just how they plan to commercially incentivize these merchants.
The technology solutions built by these companies is unarguably driving sales for them, but a significant number of these small businesses take cash and under report their revenues to pay less tax. That incentive is multifold of any other incentive for many of them.
The house of cards has well and truly collapsed for Wirecard, the German payments company that has been accused of accounting fraud. Today it announced that its German operation Wirecard AG was applying for insolvency proceedings in a Munich court, the Amtsgericht München, due to “impending insolvency and over-indebtedness.” It also issued a separate statement that elaborated to note that “the company’s ability to continue as a going concern is not assured” after it was unable to reach a deal with lenders over loans coming due on June 30 and July 1, respectively for €800 million ($896 million) and €500 million ($560 million).
It also said it hopes to restructure under temporary bankruptcy measures, and in the meantime Wirecard Bank AG would not be part of proceedings. “BaFin [the financial services watchdog] has already appointed a special representative for Wirecard Bank AG. In future, the release processes for all payments of the bank will be located exclusively within the bank and no longer at Group level.”
The collapse comes not just at a time when Wirecard’s own loans are falling due, but we have been facing a global recession due to the global health pandemic: that has had a knock-on effect for a number of industries, and so while some businesses are thriving, others have halted altogether, or slowed down considerably, which will have a direct impact on a company whose business model is set up to make incremental commissions on payments.
The Softbank-backed, publicly-traded business is still determining whether insolvency applications will also need to be filed for subsidiaries of the Wirecard Group: the company provides online and in-person payment services to merchants in other countries — most recently opening a subsidiary in Mexico — with offices in some 28 other locations.
Wirecard’s stock, traded in Germany on the Deutsche Borse Xetra exchange, has today plummeted nearly 77% (after drops in previous days), giving it a market cap of $350 million, an Enron-style collapse. As a point of contrast, when SoftBank invested $1 billion last year, it was worth around $19 billion.
The news brings a sad, but unsurprising, development to an especially rough week for the company, after its auditors Ernst & Young discovered a $2.1 billion accounting hole in its books, and then the former CEO, Markus Braun, was arrested on charges of fraud.
Those who have been watching the company for longer than the past week might also recall that all of this has been going on for months, although a separate investigation led by KPMG and published in April determined that “no incriminating evidence was found for the publicly raised accusations of balance sheet manipulation.”
Wirecard is one of the many disastrous investments made by SoftBank in recent times: the Japanese technology and investment giant put $1 billion into the company in April 2019.
Unlike many of its other bad deals — which have included troubled WeWork and Uber, which has failed to live up as a public company to the valuation expectations made by SoftBank and others when it was still private — this one did not come out of its Vision Fund, but was made directly by the SoftBank Group.
With the downfall coming as it has to a company that is publicly traded, Wirecard has been unable to offset its losses and its financial situation as they have played out on an open forum. The company counts Olympus, Getty Images, Orange, KLM among its customers.
Google said on Thursday it plans to offer crediting feature to millions of merchants in India through its Google Pay app starting later this year as the American technology group looks to help small businesses in the country steer through the pandemic and also find a business model for its mobile payments service.
The company said it was working with financial institutions to offer loans to merchants from within Google Pay for Business app. The Google Pay’s business app, which the Android giant launched late last year, has already amassed 3 million merchants, it said.
Google’s announcement comes today as part of its effort to share its broader initiatives for small and micro-businesses in India. The company said Google My Business, an app it launched in India in the second half of 2017 to help mom and pop stores and other small merchants build online presence, has been used by more than 26 million businesses in the country to list themselves on Google search and Maps. India has about 60 million small and micro-sized businesses in the nation, according to government estimates.
“Every month we drive over 150 million direct connections between these businesses and customers including calls, online reservations and direction requests,” it said.
New Delhi ordered a nationwide lockdown in late March in a bid to control the spread of Covid-19. The move forced most businesses to suspend their operations. In recent weeks, the Indian government has moved to relax some of its restrictions and many stores have resumed their businesses.
Last year Google launched Spot feature in India that allows businesses to easily create their own branded commercial fronts that will be accessible to customers through Google Pay app.
In May, Google introduced Nearby Stores as a Spot feature on Google Pay app that allowed local businesses in select part of the country get discovered by customers in their neighborhood. The company said it is expanding this offering across India starting today.
Thursday’s announcement also outlines the grip Google has on small businesses in India, and how its scale — and resources — could pose additional challenges for scores of startups that are already attempting to serve businesses.
Paytm, which works with over 16 million merchants, earlier this year launched a range of gadgets, including a device that displays QR check-out codes that comes with a calculator and USB charger, a jukebox that provides voice confirmations of transactions and services to streamline inventory management for merchants.
For some of these players, Google’s increasingly growing interest in targeting merchants means they will be facing off the search giant on two fronts. TechCrunch reported earlier this month that Google Pay had about 75 million transacting users in India, more than any of its competitors. But Google Pay, and most other payments services in India are struggling to find a business model for their services.
Facebook, Google’s global rival, has courted more than 1 million merchants in India on its WhatsApp’s business app. WhatsApp, which is the most popular app in India, is informally used by countless of additional merchants in the country.
In a statement, Brazil’s central bank said it was taking the decision to “preserve an adequate competitive environment” in the mobile payments space and to ensure “functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap.”
Banks in the nation have asked Mastercard and Visa, who are among the payments partners for WhatsApp in Brazil, to suspend money transfer on WhatsApp app. Failure to comply with the order would subject the payments companies to fines and administrative sanctions.
In its statement, Brazil’s central bank suggested it hadn’t had the opportunity to analyze WhatsApp’s payment service prior to its rollout.
Tuesday’s announcement is the latest setback for Facebook, which began testing WhatsApp Pay in India two years ago and has yet to receive the regulatory approval to expand the payments service nationwide.
Other than India, which is WhatsApp’s largest market, WhatsApp has also been testing Pay in Mexico.
A WhatsApp spokesperson told TechCrunch that the service’s goal is to use an “open model” and it is continuing to engage with “local partners and the Central Bank to make this possible.”
“In addition, we support the Central Bank’s PIX project on digital payments and together with our partners are committed to work with the Central Bank to integrate our systems when PIX becomes available,” the spokesperson added.
PIX is the central bank’s own payments service, for which it has secured partnerships with nearly 1,000 industry players. The central bank has said previously that it plans to launch PIX in November this year.
WhatsApp rolled out its mobile payments service in Brazil last week. It was the first time WhatsApp had been able to conduct a nation-wide rollout of its payments service in any market.
The service enables users to exchange money with one another and also pay businesses. The Facebook-owned service said at the time that it was not levying any fee to users for sending or receiving money but businesses were parting with a 3.99% processing fee to receive payments.
“The over 10 million small and micro businesses are the heartbeat of Brazil’s communities. It’s become second nature to send a zap to a business to get questions answered. Now in addition to viewing a store’s catalog, customers will be able to send payments for products as well,” the company wrote in a blog post published last week.
It’s unclear whether WhatsApp, Mastercard, and Visa have already complied with the central bank’s notice.
The fintech revolution is just getting started.
At least that’s the impression we got after a conversation with Plaid co-founder Zach Perret. He appeared on Extra Crunch Live last week to talk about his company’s announced exit to Visa and the larger fintech landscape.
Perret and Plaid announced a deal to sell the company to Visa earlier this year for $5.3 billion, a transaction that highlighted the company’s central position in the fintech world. Plaid provides APIs that link consumer bank accounts to apps and other financial services, making it the connective tissue of the fintech boom.
It’s probably no surprise, then, that Perret is bullish: “You’ve heard it a million times, but the quote of software eating the world [is true], and my corollary to that is [that] every company is a fintech company. And certainly every financial services company should be a fintech company.”
He said there’s lots of room left for fintech and finservices companies to create new products, which is not a bad view of the future if you want to be cheered up. Perret also noted that there are widespread opportunities for fintech companies to help underbanked people in the U.S. and abroad, which indicates a massive, untapped total addressable market.
To make sure you can take your own notes, we’ve included the full session below and excerpted a few passages from the transcript. (You can sign up for Extra Crunch here if you need access.)
First up, here’s the full call:
It’s raised $5.7 billion from Facebook. It’s taken $1.5 billion from KKR, another $1.5 billion from Vista Equity Partners, $1.5 billion from Saudi Arabia’s Public Investment Fund, $1.35 billion from Silver Lake, $1.2 billion from Mubadala, $870 million from General Atlantic, $750 million from Abu Dhabi Investment Authority, $600 million from TPG, and $250 million from L Catterton.
And it’s done all that in just nine weeks.
India’s Reliance Jio Platforms is the world’s most ambitious tech company. Founder Mukesh Ambani has made it his dream to provide every Indian with access to affordable and comprehensive telecommunications services, and Jio has so far proven successful, attracting nearly 400 million subscribers in just a few years.
The unparalleled growth of Reliance Jio Platforms, a subsidiary of India’s most-valued firm (Reliance Industries), has shocked rivals and spooked foreign tech companies such as Google and Amazon, both of which are now reportedly eyeing a slice of one of the world’s largest telecom markets.
What can we learn from Reliance Jio Platforms’s growth? What does the future hold for Jio and for India’s tech startup ecosystem in general?
Through a series of reports, Extra Crunch is going to investigate those questions. We previously profiled Mukesh Ambani himself, and in today’s installment, we are going to look at how Reliance Jio went from a telco upstart to the dominant tech company in four years.
Months after India’s richest man, Mukesh Ambani, launched his telecom network Reliance Jio, Sunil Mittal of Airtel — his chief rival — was struggling in public to contain his frustration.
That Ambani would try to win over subscribers by offering them free voice calling wasn’t a surprise, Mittal said at the World Economic Forum in January 2017. But making voice calls and the bulk of 4G mobile data completely free for seven months clearly “meant that they have not gotten the attention they wanted,” he said, hopeful the local regulator would soon intervene.
This wasn’t the first time Ambani and Mittal were competing directly against each other: in 2002, Ambani had launched a telecommunications company and sought to win the market by distributing free handsets.
In India, carrier lock-in is not popular as people prefer pay-as-you-go voice and data plans. But luckily for Mittal in their first go around, Ambani’s journey was cut short due to a family feud with his brother — read more about that here.
As I was wrapping up a Zoom meeting with my business partners, I could hear my son joking with his classmates in his online chemistry class.
I have to say this is a very strange time for me: As much as I love my family, in normal times, we never spend this much time together. But these aren’t normal times.
In normal times, governments, businesses and schools would never agree to shut everything down. In normal times, my doctor wouldn’t agree to see me over video conferencing.
No one would stand outside a grocery store, looking down to make sure they were six feet apart from one another. In times like these, decisions that would normally take years are being made in a matter of hours. In short, the physical world — brick-and-mortar reality— has shut down. The world still functions, but now it is operating inside everyone’s own home.
This not-so-normal time reminds me of 2008, the depths of the financial crisis. I sold my company BEA Systems, which I co-founded, to Oracle for $8.6 billion in cash. This liquidity event was simultaneously the worst and most exhausting time of my career, and the best time of my career, thanks to the many inspiring entrepreneurs I was able to meet.
These were some of the brightest, hardworking, never-take-no-for-an-answer founders, and in this era, many CEOs showed their true colors. That was when Slack, Lyft, Uber, Credit Karma, Twilio, Square, Cloudera and many others got started. All of these companies now have multibillion dollar market caps. And I got to invest and partner with some of them.
Once again, I can’t help but wonder what our world will look like in 10 years. The way we live. The way we learn. The way we consume. The way we will interact with each other.
Welcome to 2030. It’s been more than two decades since the invention of the iPhone, the launch of cloud computing and one decade since the launch of widespread 5G networks. All of the technologies required to change the way we live, work, eat and play are finally here and can be distributed at an unprecedented speed.
The global population is 8.5 billion and everyone owns a smartphone with all of their daily apps running on it. That’s up from around 500 million two decades ago.
Robust internet access and communication platforms have created a new world.
The world’s largest school is a software company — its learning engine uses artificial intelligence to provide personalized learning materials anytime, anywhere, with no physical space necessary. Similar to how Apple upended the music industry with iTunes, all students can now download any information for a super-low price. Tuition fees have dropped significantly: There are no more student debts. Kids can finally focus on learning, not just getting an education. Access to a good education has been equalized.
The world’s largest bank is a software company and all financial transactions are digital. If you want to talk to a banker live, you’ll initiate a text or video conference. On top of that, embedded fintech software now powers all industries.
No more dirty physical money. All money flow is stored, traceable and secured on a blockchain ledger. The financial infrastructure platforms are able to handle customers across all geographies and jurisdictions, all exchanges of value, all types of use-cases (producers, distributors, consumers) and all from the start.
The world’s largest grocery store is a software and robotics company — groceries are delivered whenever and wherever we want as fast as possible. Food is delivered via robot or drones with no human involvement. Customers can track where, when and who is involved in growing and handling my food. Artificial intelligence tells us what we need based on past purchases and our calendars.
The world largest hospital is a software and robotics company — all initial diagnoses are performed via video conferencing. Combined with patient medical records all digitally stored, a doctor in San Francisco and her artificial intelligence assistant can provide personalized prescriptions to her patients in Hong Kong. All surgical procedures are performed by robots, with supervision by a doctor of course, we haven’t gone completely crazy. And even the doctors get to work from home.
Our entire workforce works from home: Don’t forget the main purpose of an office is to support companies’ workers in performing their jobs efficiently. Since 2020, all companies, and especially their CEOs, realized it was more efficient to let their workers work from home. Not only can they save hours of commute time, all companies get to save money on office space and shift resources toward employee benefits. I’m looking back 10 years and saying to myself, “I still remember those days when office space was a thing.”
The world’s largest entertainment company is a software company, and all the content we love is digital. All blockbuster movies are released direct-to-video. We can ask Alexa to deliver popcorn to the house and even watch the film with friends who are far away. If you see something you like in the movie, you can buy it immediately — clothing, objects, whatever you see — and have it delivered right to your house. No more standing in line. No transport time. Reduced pollution. Better planet!
These are just a few industries that have been completely transformed by 2030, but these changes will apply universally to almost anything. We were told software was eating the world.
The saying goes you are what you eat. In 2030, software is the world.
Security and protection no longer just applies to things we can touch and see. What’s valuable for each and every one of us is all stored digitally — our email account, chat history, browsing data and social media accounts. It goes on and on. We don’t need a house alarm, we need a digital alarm.
Even though this crisis makes the near future seem bleak, I am optimistic about the new world and the new companies of tomorrow. I am even more excited about our ability to change as a human race and how this crisis and technology are speeding up the way we live.
This storm shall pass. However the choices we make now will change our lives forever.
My team and I are proud to build and invest in companies that will help shape the new world; new and impactful technologies that are important for many generations to come, companies that matter to humanity, something that we can all tell our grandchildren about.
I am hopeful.
In India, it’s Google and Walmart-owned PhonePe that are racing neck-and-neck to be the top player in the mobile payments market, while Facebook remains mired in a regulatory maze for WhatsApp Pay’s rollout.
In May, more than 75 million users transacted on Google Pay app, ahead of PhonePe’s 60 million users, people familiar with the companies’ figures told TechCrunch. More than 10 million users transact on SoftBank -backed Paytm’s app everyday, according to internal data seen by TechCrunch.
Google still lags Paytm’s reach with merchants, but the Android -maker has maintained its overall lead in recent months despite every player losing momentum due to one of the most stringent lockdowns globally in place in India.
The company is facing an antitrust probe in India over allegations that it is abusing its market position to unfairly promote its mobile payments app in the country, Reuters reported last month.
Paytm, once the dominant player in India, has been struggling to sustain its user base for nearly two years. The company had about 60 million transacting users in January last year, said people familiar with the matter.
Paytm had over 50 million monthly active users on its app in May, a spokesperson told TechCrunch.
Data sets consider transacting users to be those who have made at least one payment through the app in a month. It’s a coveted metric and is different from the much more popular monthly active users (MAU), or daily active users (DAU) that various firms use to share their performance. A portion of those labeled as monthly active users do not make any transaction on the app.
India’s homegrown payment firm, Paytm, has struggled to grow in recent years in part because of a mandate by India’s central bank to mobile wallet firms — the middlemen between users and banks — to perform know-your-client (KYC) verification of users, which created confusion among many, some of the people said. These woes come despite the firm’s fundraising success, which amounts to more than $3 billion.
In a statement, a Paytm spokesperson said, “When it comes to mobile wallets one has to remember the fact that Paytm was the company that set up the infrastructure to do KYC and has been able to complete over 100 million KYCs by physically meeting customers.”
Paytm has long benefited from integration with popular services such as Uber, and food delivery startup Swiggy, but fewer than 10 million of Paytm’s monthly transacting users have relied on this feature in recent months.
Two executives, who like everyone else spoke on the condition of anonymity because of fear of retribution, also said that Paytm resisted the idea of adopting Unified Payments Interface. That’s the nearly two-year-old payments infrastructure built and backed by a collation of banks in India that enables money to be sent directly between accounts at different banks and eliminates the need for a separate mobile wallet.
Paytm’s delays in adopting the standard left room for Google and PhonePe, another early adopter of UPI, to seize the opportunity.
Paytm, which adopted UPI a year after Google and PhonePe, refuted the characterization that it resisted joining UPI ecosystem.
“We are the company that cherishes innovation and technology that can transform the lives of millions. We understand the importance of financial technology and for this very reason, we have always been the champion and supporter of UPI. We, however, launched it on Paytm later than our peers because it took a little longer for us to get the approval to start UPI based services,“ a spokesperson said.
A sign for Paytm online payment method, operated by One97 Communications Ltd., is displayed at a street stall selling accessories in Bengaluru, India, on Saturday, Feb. 4, 2017. Photographer: Dhiraj Singh/Bloomberg via Getty Images
Missing from the fray is Facebook, which counts India as its biggest market by user count. The company began talks with banks to enter India’s mobile payments market, estimated to reach $1 trillion by 2023 (according to Credit Suisse), through WhatsApp as early as 2017. WhatsApp is the most popular smartphone app in India with over 400 million users in the country.
Facebook launched WhatsApp Pay to a million users in the following year, but has been locked in a regulatory battle since to expand the payments service to the rest of its users. Facebook chief executive Mark Zuckerberg said WhatsApp Pay would roll out nationwide by end of last year, but the firm is yet to secure all approvals — and new challenges keep cropping up. The company, which invested $5.7 billion in the nation’s top telecom operator Reliance Jio Platforms in April, declined to comment.
PhonePe, which was conceived only a year before WhatsApp set eyes to India’s mobile payments, has consistently grown as it added several third-party services. These include leading food and grocery delivery services Swiggy and Grofers, ride-hailing giant Ola, ticketing and staying players Ixigo and Oyo Hotels, in a so-called super app strategy. In November, about 63 million users were active on PhonePe, 45 million of whom transacted through the app.
Karthik Raghupathy, the head of business at PhonePe, confirmed the company’s transacting users to TechCrunch.
Three factors contributed to the growth of PhonePe, he said in an interview. “The rise of smartphones and mobile data adoption in recent years; early adoption to UPI at a time when most mobile payments firms in India were betting on virtual mobile-wallet model; and taking an open-ecosystem approach,” he said.
“We opened our consumer base to all our merchant partners very early on. Our philosophy was that we would not enter categories such as online ticketing for movies and travel, and instead work with market leaders on those fronts,” he explained.
“We also went to the market with a completely open, interoperable QR code that enabled merchants and businesses to use just one QR code to accept payments from any app — not just ours. Prior to this, you would see a neighborhood store maintain several QR codes to support a number of payment apps. Over the years, our approach has become the industry norm,” he said, adding that PhonePe has been similarly open to other wallets and payments options as well.
But despite the growth and its open approach, PhonePe has still struggled to win the confidence of investors in recent quarters. Stoking investors’ fears is the lack of a clear business model for mobile payments firms in India.
PhonePe executives held talks to raise capital last year that would have valued it at $8 billion, but the negotiations fell apart. Similar talks early this year, which would have valued PhonePe at $3 billion, which hasn’t been previously reported, also fell apart, three people familiar with the matter said. Raghupathy and a PhonePe spokesperson declined to comment on the company’s fundraising plans.
As UPI gained inroads in the market, banks have done away with any promotional incentives to mobile payments players, one of their only revenue sources.
At an event in Bangalore late last year, Sajith Sivanandan, managing director and business head of Google Pay and Next Billion User Initiatives, said current local rules have forced Google Pay to operate without a clear business model in India.
The coronavirus pandemic that prompted New Delhi to order a nationwide lockdown in late March preceded a significant, but predictable, drop in mobile payments usage in the following weeks. But while Paytm continues to struggle in bouncing back, PhonePe and Google Pay have fully recovered as India eased some restrictions.
About 120 million UPI transactions occurred on Paytm in the month of May, down from 127 million in April and 186 million in March, according to data compiled by NPCI, the body that oversees UPI, and obtained by TechCrunch. (Paytm maintains a mobile wallet business, which contributes to its overall transacting users.)
Google Pay, which only supports UPI payments, facilitated 540 million transactions in May, up from 434 million in April and 515 million in March. PhonePe’s 454 million March figure slid to 368 million in April, but it turned the corner, with 460 million transactions last month. An NPCI spokesperson did not respond to a request for comment.
PhonePe and Google Pay together accounted for about 83% of all UPI transactions in India last month. UPI itself has over 117 million users.
Industry executives working at rival firms said it would be a mistake to dismiss Paytm, the one-time leader of the mobile payments market in India.
Paytm has cut its marketing expenses and aggressively chased merchants in recent quarters. Earlier this year, it unveiled a range of gadgets, including a device that displays QR check-out codes that comes with a calculator and USB charger, a jukebox that provides voice confirmations of transactions and services to streamline inventory management for merchants.
Merchants who use these devices pay a recurring fee to Paytm, Vijay Shekhar Sharma, co-founder and chief executive of the firm told TechCrunch in an interview earlier this year. Paytm has also entered several businesses, such as movie and travel ticketing, lending, games and e-commerce, and set up a digital payments bank over the years.
“Everyone knows Paytm. Paytm is synonymous with digital payments in India. And outside, there’s a perceived notion that it’s truly the Alipay of India,” an executive at a rival firm said.
The global spread of COVID-19 and resulting orders to shelter in place have hit retailers hard.
But while the present is largely bleak, preparing for the future has retailers adopting technologies faster than ever. Their resilience and innovation means retail will look and fee different when the world reopens.
We gathered four views on the future of retail from the TechCrunch team:
“I’ve got a really high attention to detail, which might sound great, but it’s possibly a curse because I can’t help but spot problems with everything around me,” says Peter Ramsey .
He’s the founder of Built for Mars, a U.K.-based UX advisory, and he has spent the last three months documenting and analyzing the user experience of a dozen leading British banks — both incumbents and challengers — including Barclays, HSBC, Santander, Monzo, Starling and Revolut.
“Quite literally, I opened 12 real bank accounts,” he explains. “You remember the stress of opening one account? I did that 12 times, [and] it was probably a terrible idea. But I really needed to control as many variables as possible, and this was the only way of doing that.”
Next, Ramsey says he “logged everything,” recording every click, screen and action. “I saved every letter, and made a note of when they arrived. I recorded pretty much everything I could,” he recalls. “At one point I even weighed all the debit cards to see if some were heavier. That was a total waste of time though, because they all weighed the same amount. But you see what I mean, I just thought about making it as scientific as possible. Also, UX is really quite subjective, so I wanted to back up my opinions with some more quantifiable metrics.”
The resulting analysis — covering opening an account, making a first payment and freezing your card — supported by individual bank case studies, is being published on the Built for Mars website over the month with a new interactive chapter released weekly.
After being given early access to the first three chapters and an initial series of case studies, I put several questions to Ramsey to understand his motivation, methodology and what he learned. And if you’re wondering which bank came out on top, keep reading.
TechCrunch: Why did you choose to do this on banks?
Peter Ramsey: My background is in fintech, and I think the banks are just in this weird place right now. When they first came out I think consumers were surprised at how much better the apps were. Banking was renowned for having old software, it was almost acceptable for an old bank to be buggy. But now that these challenger banks have been out for five years, I think that perception has changed. So I chose the banks because they represent this industry of “challenger” versus “legacy.” Plus, for billion-dollar companies, you’d expect them all to really care about experience.
The additions include Shopify Balance, which Chief Product Officer Craig Miller described as an attempt to rethink the bank account in a way that’s better suited to a business’ needs.
“The traditional products offered by banks were created in a world that’s very different,” Miller said. “We went back to first principles of how they should be designed.”
So Shopify Balance is a merchant account with no fees and no minimum balances.
Miller said that “initially,” the only funds in the account will come from Shopify payments — merchants won’t be able to deposit additional money, but they will be able to log in, track cash flow and pay bills. The account comes with a debit card (virtual or physical), and Shopify said it will also offer cashback rewards and discounts on expenses like shipping and marketing.
The company is also announcing a Buy Now, Pay Later feature, allowing merchants to give their customers the option to split their payments into four equal installments, with no interest or additional fees.
Buy Now, Pay Later could be particularly useful for merchants selling bigger ticket items — at a time of record unemployment and economic uncertainty, concerns about “going into a serious amount of debt” could prevent some customers from making these purchases on their credit cards. At the same time, the merchants will still get paid “instantly.” (Miller said Shopify is working with a financial partner for both Balance and Buy Now, Pay Later, though he declined to offer more specifics.)
Shopify plans to release both products later in 2020.
Other new features include a Local Delivery option allowing merchants to design a separate delivery experience for local customers. The company is also opening its robotics-powered fulfillment network to merchants and adding the option to collect tips at checkout.
Miller said the broad theme linking everything Shopify has done in the past few months is a “crazy acceleration of how important digital is” as merchants adapt to the COVID-19 pandemic.
The event also comes just one day after Facebook announced Facebook Shops, which will allow merchants to include digital storefronts on their Facebook Pages and Instagram profiles. Shopify is actually a partner in this initiative; merchants will be able to manage their Facebook and Instagram storefronts from the Shopify platform.
Khatabook, a startup that is helping small businesses in India record financial transactions digitally and accept payments online with an app, has raised $60 million in a new financing round as it looks to gain more ground in the world’s second most populous nation.
The new financing round, Series B, was led by Facebook co-founder Eduardo Saverin’s B Capital. A range of other new and existing investors, including Sequoia India, Partners of DST Global, Tencent, GGV Capital, RTP Global, Hummingbird Ventures, Falcon Edge Capital, Rocketship.vc and Unilever Ventures, also participated in the round, as did Facebook’s Kevin Weil, Calm’s Alexander Will, CRED’s Kunal Shah and Snapdeal co-founders Kunal Bahl and Rohit Bansal.
The one-and-a-half-year-old startup, which closed its Series A financing round in October last year and has raised $87 million to date, is now valued between $275 million to $300 million, a person familiar with the matter told TechCrunch.
Hundreds of millions of Indians came online in the last decade, but most merchants — think of neighborhood stores — are still offline in the country. They continue to rely on long notebooks to keep a log of their financial transactions. The process is also time-consuming and prone to errors, which could result in substantial losses.
Khatabook, as well as a handful of young and established players in the country, is attempting to change that by using apps to allow merchants to digitize their bookkeeping and also accept payments.
Today more than 8 million merchants from over 700 districts actively use Khatabook, its co-founder and chief executive Ravish Naresh told TechCrunch in an interview.
“We spent most of last year growing our user base,” said Naresh. And that bet has worked for Khatabook, which today competes with Lightspeed -backed OkCredit, Ribbit Capital-backed BharatPe, Walmart’s PhonePe and Paytm, all of which have raised more money than Khatabook.
The Khatabook team poses for a picture (Khatabook)
According to mobile insight firm AppAnnie, Khatabook had more than 910,000 daily active users as of earlier this month, ahead of Paytm’s merchant app, which is used each day by about 520,000 users, OkCredit with 352,000 users, PhonePe with 231,000 users and BharatPe, with some 120,000 users.
All of these firms have seen a decline in their daily active users base in recent months as India enforced a stay-at-home order for all its citizens and shut most stores and public places. But most of the aforementioned firms have only seen about 10-20% decline in their usage, according to AppAnnie.
Because most of Khatabook’s merchants stay in smaller cities and towns that are away from large cities and operate in grocery stores or work in agritech — areas that are exempted from New Delhi’s stay-at-home orders, they have been less impacted by the coronavirus outbreak, said Naresh.
Naresh declined to comment on AppAnnie’s data, but said merchants on the platform were adding $200 million worth of transactions on the Khatabook app each day.
In a statement, Kabir Narang, a general partner at B Capital who also co-heads the firm’s Asia business, said, “we expect the number of digitally sophisticated MSMEs to double over the next three to five years. Small and medium-sized businesses will drive the Indian economy in the era of COVID-19 and they need digital tools to make their businesses efficient and to grow.”
Khatabook will deploy the new capital to expand the size of its technology team as it looks to build more products. One such product could be online lending for these merchants, Naresh said, with some others exploring to solve other challenges these small businesses face.
Amit Jain, former head of Uber in India and now a partner at Sequoia Capital, said more than 50% of these small businesses are yet to get online. According to government data, there are more than 60 million small and micro-sized businesses in India.
India’s payments market could reach $1 trillion by 2023, according to a report by Credit Suisse .
The cannabis market was in the midst of a correction when the COVID-19 crisis hit and could emerge stronger than ever.
After a breakthrough period of growth, cannabis startups entered 2020 with depressed values and an uncertain future. Now, with millions sheltering in place, many companies are seeing unprecedented demand and growth opportunities as many states classified the industry as an essential business.
TechCrunch surveyed top investors focused on the cannabis market to gather their thoughts on current trends and opportunities. The results paint a stunning picture of an industry on the verge of breaking away from a market correction. Our six respondents described numerous opportunities for startups and investors, but cautioned that this atmosphere will not last long.
Cannabis is an essential business
Per the investors in our survey, most see the the pandemic as a turning point for cannabis thanks to increased demand and the industry’s designation as an essential business. Sean Stiefel, CEO of Navy Capital, notes that states will look to cannabis to help resolve budget deficits and said his firm is especially excited for legalization in New York, New Jersey, Pennsylvania and Connecticut.
“Cannabis went from illegal to essential in about two weeks flat,” said Matt Hawkins of Entourage Effect Capital. “Cannabis is now listed right alongside hospitals, doctors, grocery stores, gas stations and fire departments as an essential service.”
WooCommerce, the e-commerce platform developed by Automattic, is improving the payment feature with a native solution called WooCommerce Payments. The payment feature is powered by Stripe. Compared to previous payment solutions on WooCommerce websites, it is fully integrated with the rest of the platform.
In case you’re not familiar with Automattic, it is also the company behind WordPress.com, Longreads, Simplenote and Tumblr. WooCommerce is built on WordPress, which means that you can create a website using WordPress and start accepting orders thanks to WooCommerce.
Previously, WooCommerce users could enable extensions to embed payment widgets on their websites. You could use Stripe, Amazon Pay, Square or PayPal for instance.
WooCommerce Payments takes this feature one step further by making it as easy as possible to get started and accept orders. Following a successful beta test, it is available to customers in the U.S. starting today.
The best part about WooCommerce Payments is that you can control payments directly in the WooCommerce back end. There’s a new payment tab that lets you view charges, issue refunds and deal with disputes. You don’t have to connect to your Stripe account or any third-party site.
When it comes to pricing, transactions on WooCommerce Payments cost 2.9% + $0.30 per transaction. There’s no set up fees or monthly fees. In other words, you’ll end up paying the same fees when you use WooCommerce Payments or a custom Stripe integration.
In the future, WooCommerce plans to add the ability to save cards as well as support for subscriptions and in-person payments. The company also plans to roll out WooCommerce Payments to more countries.
Many merchants have started using WooCommerce over the past couple of months, probably due to the coronavirus outbreak. The number of active WooCommerce sites grew by 34% in two months while the number of shoppers grew by 70%.
The economic effects of COVID-19 could delay Africa’s next big IPO — that of Nigerian fintech unicorn Interswitch.
If so, it wouldn’t be the first time the Lagos-based payments company’s plans for going public were postponed; the tech world has been anticipating Interswitch’s stock market debut since 2016.
For the continent’s innovation ecosystem, there’s a lot riding on the digital finance company’s IPO. After e-commerce venture Jumia, it would become only the second listing of a VC-backed African tech company on a major exchange. And Interswitch’s stock market debut — when it occurs — could bring more investor attention and less controversy to the region’s startup scene.
TechCrunch reached out to Interswitch on the window for listing, but the company declined to comment. The tech firm’s path from startup to IPO aspirant traces back to the vision of founder Mitchell Elegbe, a Nigerian electrical engineering graduate whose entire career has pretty much been Interswitch.
Africa’s tech scene is still fairly young, but it does have a timeline with several definitive points. An early one would be the success of mobile money in East Africa, with the launch of Safaricom’s M-Pesa in 2007. Another is the notable wave of VC-backed startups and founders that launched around 2010.
Interswitch CEO Mitchell Elegbe (Photo Credits: Interswitch)
With Interswtich, Elegbe pre-dated both by a number of years, founding his fintech company back in 2002 to connect Nigeria’s largely disconnected banking system. The firm became a pioneer of the infrastructure to digitize Nigeria’s economy.
Interswitch created the first electronic switch whereby Nigerian financial institutions could communicate and thereby operate ATMs and point of sales operations. The company now provides much of the rails for Nigeria’s online banking system.
Leaked images obtained by TechCrunch reveal that Google considered and designed a feature that would let people donate money to websites to help support news publishers, bloggers, and musicians. But Google scrapped the idea and chose not to build out the product, despite these kinds of businesses and creators often struggling to earn revenue.
Google’s design for tipping money to The New York Times
Last year, Google explored tipping as a new wing of Google Contributor, a service that lets people pay around 1 cent per page view to remove ads from partnered websites. Screenshots of the tipping feature showed the ability to make one-time donations of $0.20 to $5 to help support sites. “Want to see more content like this on our site? Support with a contribution” one version explained. It’s unclear if Google would have taken the same 10% cut of tips as it does from Contributor ad removal fees. Google mocked up designs for tipping on the sites of the New York Times, Wired, “Tech Crunch” [sic], and more.
If Google had launched the tipping feature, it could have provided a valuable tool to sites battered by the declining display ad market. And now amidst coronavirus lockdowns that have cancelled events and reduced podcast listenership that media publishers rely on for revenue, the ability to accept donations could have helped sites avoid laying off staff. Perhaps Google should consider resurrecting tipping as a more sustainable form of assistance alongside its new Journalism Emergency Relief Fund.
Google’s designs for tipping money to news sites
TechCrunch obtained these screenshots from a source that provided evidence that they came directly from Google. When asked, Google confirmed that the designs were of internal idea it explored last year but decided not to pursue as part of Contributor and Google Funding Choices, which lets sites ask visitors to disable ad blockers, or instead buy a subscription or pay a per page fee to remove ads. Google shared the idea with under a handful of publishers in a request for feedback. The company decided to prioritize other products, including a way for sites to request consent to personalize ads using their data amidst strengthened regulations like GDPR.
A Google spokesperson provided TechCrunch with a statement that “We recognize that there isn’t a single business model that works for all publishers today and think it’s critical to explore new technologies that can help publishers make more money. Funding Choices is a great example of a product we have invested in significantly and will continue to evolve to support publishers and their monetization strategies.”
A design for the floating button to be overlaid on websites for making a contribution
In fact, few business models work for publishers at all. With layoffs common across local news, national papers, and digital outlets, publishers could use have used all the help they could get, even if long-term subscriptions would be more lucrative than one-off tips.
Designs for Google’s tipping feature show a floating “Support New York Times” button overlaid at the bottom of the screen as you scroll. Tapping it reveals instructions to “Select an amount below using Google Contributor to help fund this site” with options like $1, $3, or $5.
Google’s designs for tipping on a musician’s website
After choosing one, users log into their Google account if they aren’t already, and then “By clicking ‘Pay now’ you agree that: You will use your Google Payments account to make this one-time payment.” You’re then returned to the page you were viewing, with the button saying “Thank you for your support!” before shrinking to just the Contributor logo.
Google also designed a micropayments version of the feature where users could make smaller donations, such as $0.20. This call to action could be inserted into a static position inside a website. When a user’s contributions totaled $1 or more, they would be billed. They’d also have the option to save their contribution and make it later.
Google’s designs for micropayment tipping to blogs
To drive home the emotional satisfaction of making a donation, this design shows a profile photo of you and tip recipient with a heart in between. Afterwards, a cute cat photo illustration shows a messaging saying “Thanks for the support. Your contribution is saved and we will send a confirmation email” with a cheeky “Purrrrrfect, thanks!” before returning you to the site.
Beyond traditional news sites, Google mocked up the tipping feature for The Points Guy travel advice site, the Spiritual Boss Babe blog, the Miranda Sings musician site, and the Forest Research UK government site. TechCrunch was not aware that Google was using our site in mockups for the tipping feature. Other sites included in the mockups did not respond to inquiries about if they were asked for feedback.
Google got into the publisher funding space with Google One Pass in 2011, helping users buy subscriptions to sites before it was shut down a year later. In 2014, Google Contributor launched to let people pay a monthly fee in exchange for ad removal on partnered sites, but that program concluded around the end of 2016.
In 2017, Google relaunched the program with users paying up front to fund a per page view fee for removal, and that program remains active with some publishers. The tech giant also operates Subscribe With Google, which lets people buy and manage publisher subscriptions or fan club entry from their Google account, and then surfaces that site’s content atop related Google searches.
If Google ever chose to revive the tipping feature and taxed it 10% like Contributor, it could create a modest new revenue stream. But more importantly, it could help fuel the creation of the content that fills its News and Search results. It would also allow Google to double-dip, potentially earning money from tips and from the ads users see on those sites.
A tipping feature could be especially helpful for websites that haven’t figured out a premium subscription strategy and mostly rely on ads. The fall of display ad prices, worsened by the COVID-19 recession, could put these publishers in danger of closing. BuzzFeed and Vox have cut staff pay or furloughed team members while tons of newspaper and sites like Protocol have suffered layoffs.
Tips might not replace other revenue streams, but could extend sites’ runway. A voluntary option to accept tips without having to build all the payments infrastructure could be a lifeline for the news business, if Google would ordain it a priority.