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Hi embedded finance friend

sticking with the usual rhythm, this is a podcast mailing. But as mentioned in last week’s edition, I want to play around with the format. For the next few weeks, I am keeping the same format each week. Therefore, I will cover each week the 3-5 most important embedded finance news stories, with the small difference, that every two weeks the first news stories is a new podcast episode (like this week).

The majority of feedback was positive for the change in format, although not everybody liked it. Thus, please keep sharing your feedback with me. Nevertheless, I will definitely keep this format for the the summer (~until the end of August) and decide then how to proceed.

On a personal note, I have arrived in Mumbai a few days ago and will be partially working remotely from here and also taking some time off. I visit my in-laws once a year, but its my first time in India during monsoon season. My focus remains on embedded finance in Europe even while being here, but if there are any interesting stories or potential podcast guests from India or other parts of the world, now might be a good time to chat. Please reach out 🙂 

But now let’s dive in 👇️ 

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Why did UniCredit acquire Vodeno and Aion Bank?

I thought July is going to be a quiet month for embedded finance. I was so wrong. We had probably one of the biggest announcement in the European ecosystem this year: Italian bank UniCredit acquired Polish banking infrastructure provider Vodeno and Belgian bank Aion Bank for € 370 million (pending regulatory approval; expected for later this year). Both companies were previously owned by the private equity firm Warburg Pincus and are offering together a banking-as-a-service service product where Vodeno brings in the technology and Aion Bank the licence.

There is a lot to uncover, so I invited embedded finance expert Shaul David to a new episode of the Embedded Finance Review Podcast. We speak about what we know about the acquisition, why we think it happened, how it could affect Vodeno’s joint venture with NatWest in the UK and how other banks might react.

You can find the episode on Spotify, Apple Podcasts and other podcasting apps.

_{(Unfortunately, I wasn’t able to publish a written summary. Please get in touch if you are interested, I might do it in the next few days)}

Visa Europe is on a partnering spree

Toqio announces a new partnership with Visa (Toqio) and Weavr extends it’s existing partnership with Visa (LinkedIn). Partnerships are essential for a company like Visa to succeed in embedded finance. Only regulated companies can partner with Visa (the same applies to MasterCard) but at least today, many of the non-financial brands are opting to build their fintech products with a regulated partner. Thus, Visa needs to ensure its present and (ideally) the preferred scheme for card issuing at these partner’s platform. A trend that started already when Visa made investments in Solaris and Railsr a few years ago, mainly to catchup with MasterCard which had a stronger presence in the fintech world at that point in time.

Coming to the partnerships, Toqio’s partnership with Visa enables their corporate clients to access and issue cards directly from Toqio’s platform. Toqio’s main product offering is a banking frontend and orchestration solution to launch banking products quickly. To put it simply, Toqio collaborates with different banking-as-a-service providers and the combined offering enables corporations to launch banking products with very limited own efforts.

Technically, Weavr also contains orchestration features (see also news below) but is more comparable to a standard banking-as-a-service provider as it does not provide any frontend products. Weavr announced their partnership with Visa already in June 2023, and now announced it will be able to access the Visa Direct functionality in their product as well. With Visa Direct, card owners can receive funds in real time directly onto their cards, a feature that can be valuable in few different use-cases.

Weavr receives e-money licence in Malta

The British embedded banking provider Weavr is granted an e-money licence in the EU via it’s Maltese operation (Financial IT). The company focuses on non-financial brands and specifically targets B2B SaaS companies (see also news above). Since Weavr did not have an e-money licence in the EU until now and does not have one in the UK, it leverages other regulated providers in the background, mostly Bulgarian banking-as-a-service provider Paynetics. Thus, the model is a bit of a mix of a standard banking-as-a-service and an orchestration provider. With their own e-money licence in the EU, Weavr will be able to bring more of the controls and processes in-house. It can be expected that Weavr will also try to receive an e-money licence in the UK, but with the recent developments around Railsr and Modulr, the British regulator FCA might take a closer look into new banking-as-a-service licence applications.

Food marketplace Soplaya embeds financing product

Italian food marketplace Soplaya has announced a partnership with Finmid, which enables them to offer financing options to their customers (Finmid). Soplaya’s solution connects Italian restaurants with famers and provides them a digital solution for procurement of all kinds of ingredients and food items. The restaurants and chefs can now pay for their products at a later point in time, giving them more flexibility and improve their cashflow.

In other news

• Which licences can be passported within the EU and which not? (LinkedIn)

• What is the cost of doing banking-as-a-service? (American Banker)

• Government 2.0: How embedded finance can revolutionize public services (Forbes)

• X continues to secure money transmitter licenses in the US (SocialMedia Today)

• Is the Synapse bankruptcy the Titanic or the iceberg? (The Banker)

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