The FinTech IPO Index has enjoyed a rebound so far, despite the usual volatility.
Year to date, the group is up 22%, buoyed by the past week’s rallies that saw the Index rise by 6.4%.
Earnings season has shown that — as evidenced from the banks and the payment networks like Mastercard and Visa — though a recession may in the works this year, consumer spending was buoyant in the fourth quarter and pockets of strength still remain. Thursday (Jan. 26) gave a notable lift to the market at large as broader markets gained on positive GDP data.
For the FinTechs, it was a show dominated by the platforms. A slew of new product announcements and partnerships have taken hold of tailwinds provided by the aforementioned spending and a shift to digital payments and installment loans.
Installment Payments Make Inroads in Travel
Affirm shares rose in a week that heralded its announcement that it was working with Kayak to offer travelers payment flexibility amid a 40% year-over-year increase in the cost of plane tickets. Travel demand remains high, and the joint efforts will allow travelers to split costs greater than $150 into monthly payments.
In separate data points marking the marked rebound in travel-related spending as economies re-open, PYMNTS reported on Thursday that Mastercard’s cross-border payments volumes were up 31% on a local currency basis. Affirm’s shares soared more than 17.2% through the past five sessions.
Nubank followed close behind, and this week announced that it has received a loan of up to $150 million from the International Finance Corporation. The IFC is the private lending arm of the World Bank. The loan has a three year maturity term, and will help the company expand its financial inclusion efforts in Colombia, according to the announcement. Nubank shares noted a 17.1% gain.
Upstart gained 12% and said that it has introduced new features to its auto retail platform in a bid to simplify the vehicle buying experience, as noted by PYMNTS. As part of the initiative, during the second quarter of this year the company will introduce a digital finance tool, allowing for “frictionless signing and contracting,” without a new sales process required for dealers. The company is also due to launch an online sales tool that lets consumers complete their car purchases entirely online. Upstart says both tools can be customized to fit with dealerships’ workflows and software, according to the announcement.
Separately, Marqeta said that its has launched a new web push provisioning product. The shares were 11% higher. The Marqeta announcement said that the push provisioning reduces friction at the point of sale and lets the firm’s enterprise customers give their end users the ability to pay directly from their mobile wallets without requiring them to download a mobile application. In the meantime, said the company, conversion rates improve.
Paymentus also made headlines, and the stock bounced nearly 5% higher as the electronic bill-pay company has expanded the cash payment capabilities on its instant payment network.
In terms of mechanics, the expansion is powered by the Green Dot Network. Billers connected to the Paymentus network can accept cash payments from customers at more than 90,000 locations. The announcement comes as the Federal Reserve has reported that cash payments account for a fifth of all transactions, while “cash stuffing” has become a popular budgeting trend for Gen Z consumers.
Real estate services platform Doma Holdings saw its stock ratchet up 6.5% through the past five sessions. The company said it had added digital payment solution provider paymints.io to its AgentMarketplace vendor partnership program. The addition, according to the announcement, reduces the risk of wire fraud and allows homebuyers to digitally deposit earnest money.
PYMNTS Data: Why Consumers Are Trying Digital Wallets
A PYMNTS study, “New Payments Options: Why Consumers Are Trying Digital Wallets” finds that 52% of US consumers tried out a new payment method in 2022, with many choosing to give digital wallets a try for the first time.