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JP Morgan Chase is making its biggest acquisition since the financial crisis in acquiring InstaMed, the medical payments company, for more than $500 million; InstaMed automates medical billing by connecting hospitals, labs, and doctors offices with insurers and HMOs that make payments; they have 300 employees and processed $94 billion in transactions last year; it is interesting that JP Morgan’s only other significant acquisition in the last decade was WePay, another payments company that competes with PayPal and Stripe. Source.

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In an interview with Karen Webster, the CEO of PYMNTS.com, the managing director of Wirecard North America, Deirdre Ives, discusses the growing demand for digital disbursements; the spread of mobile and online commerce and the growing real time payments infrastructure means that consumer expectations are increasing when it comes to the speed of receiving money; Ives said, “When you look at the trends out there, customers want speed, choice and ease — not only about who they pay, but how they are paid, too.” Source.

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Banking as a service is taking root in some of the country’s largest brands; at a conference this week the Head of Payments and Risk at Uber talked about all the ways they are leveraging financial services to increase the loyalty of their drivers; from allowing drivers to overdraft their debit cards up to $100 to enabling them to access their money in near real time, up to five times a day; Uber and other large brands are bringing fintech and banking as a service to boost brand loyalty, drive more business or increase employee retention. Source.

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SoFi CEO Anthony Noto was interviewed by Jim Cramer on CNBC’s Mad Money yesterday where he talked about the investing habits of millennials; many young investors like to invest in individual stocks that cost under $10 seeing them as less expensive; Noto said this is why SoFi launched free ETFs so young investors could get broad exposure to the market; but they are also interested in investing in names they know and understand so SoFi launched their new gig economy ETF; early investors in SoFi Invest don’t want to put a lot of money at risk. Source.

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In an op-ed in American Banker the chief executive of the European Banking Federation, Wim Mijs, discusses the importance of cooperation between Europe and the US when it comes to financial regulation; he points to the G-20 meeting in Pittsburgh in 2009 during the height of the financial crisis that established the G-20 as the new permanent council for international economic cooperation; but the recent movement towards unilateralism may result in market fragmentation that will be bad for all parties; instead, “U.S. and EU regulators can better ensure a resilient and sustainable financial system by adhering to the long-standing principle of maintaining a level playing field and furthering cross-border cooperation”. Source.

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Chris Skinner writes about the five phases in the development of the fintech industry; phase one was from 2005-2014 and it was about disruption where new fintech platforms focused on disrupting the banks; phase two from 2014-2017 was about discussion where banks and fintech platforms began to talk and the banks learned more about what these platforms can offer; we are now in phase three 2017-2022 which Skinner says is all about partnerships as there are dozens (possibly hundreds globally) of examples of bank-fintech partnerships; phase four from 2022-2027 will be about integration where open banking and open APIs become fully integrated into the banking system; finally, phase five he says will be about renewal where banking will be integrated with fintech and big tech. Source.

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An in depth piece in The Financial Brand focuses on the new bank account offering from T-Mobile; called T-Mobile Money the new account, offered in partnership with BankMobile, offers consumers 4% interest on balances up to $3,000 and 1% of balances above that, although to get that highest rate you have to be a T-Mobile customer; these are mobile-based accounts that are open to everyone, not just T-Mobile customers; they also provide overdraft protection of up to $50 without any fee, as long as the balance is restored within 30 days. Source.

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Frank Rotman, a founding partner at QED Investors, pens the popular Fintech Junkie blog and in his latest article he attacks relationship banking; he found that bankers don’t really grasp relationship banking because they are not treating their customers any differently to non-customers; he argues that when it comes to their customers most banks are “executing transactions for vs. building relationships with them”; this is why there is an opportunity for a new kind of bank, a “vertical bank” that can serve a a group of customers with similar wants and needs. Source.

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The challenges continue to mount for UK challenger Metro Bank; founded by the former head of Commerce Bank in NJ, Vernon Hill, the bank is being investigated by British regulators for mistakes it made in risk-weighting commercial mortgages; shares of Metro Bank are down 80% over the past year and by more than 30% over just the past six week so there are calls for the ouster of Vernon Hill, the bank’s chairman; Metro Bank has also been hurt by its reliance on residential mortgages which make up about two-thirds of its loan portfolio. Source.

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