Interview with Stax Founder and CEO, Suneera Madhani
In this interview we sat down with Suneera Madhani, Founder and CEO of Stax, to learn more about her meteoric rise through payments and Staxâs journey as an emerging tech unicorn.
Currently, most âbuy now, pay laterâ products can only hurt a userâs credit â if thereâs even an impact on their credit score at all. But major BNPL companies, consumer advocates and credit bureaus all say they are trying to change that. The effort began to gain steam in June, when the CFPB urged âpay-in-fourâ BNPL companies, credit bureaus and scoring companies to work together on incorporating BNPL data into usersâ credit scores in a way that rewards responsible behavior. But BNPL companies say they are hesitant to trust credit bureaus with the data.
Buying companies may be one way to offset the threat of reduced growth, said Zach Spellman, a project manager at the payments industry consulting firm The Strawhecker Group. âAcquisitions are a way to help achieve those greater growth rates,â he said. Activity in the first half of the year was about on par with last year, but then there was a lull in July before the buying ramped up this month, Spellman said. For the first half of the year, there have been about 66 deals in the industry, compared to 59 in the first half of 2021, according to TSG. Ultimately, Spellman expects 2022 totals might be about the same as last year.
In a new letter sent to the entire House and Senate, a coalition made up of 51 state bankers associations and state credit union associations and leagues from across the country joined the American Bankers Association and Credit Union National Association in strongly urging lawmakers to oppose Senator Roger Marshall and Dick Durbinâs deeply flawed âCredit Card Competition Act of 2022.â In the letter, the associations say that the misguided Marshall-Durbin proposal will lead to âfewer options for consumers, greater threats to consumer data and privacy, weakened community banks and credit unions and the disappearance of card rewards programs that families of all income levels use to stretch their budgets," while also "transferring wealth...to a handful of high-volume, highly profitable large merchants."
TSG, a globally recognized analytics, intelligence, and consulting firm in the payments industry, is pleased to announce several new hires as the company expands its best-in-class solutions. âWe are excited to add a great group of people to the team,â said Mike Strawhecker, President. âTSG is in a critical growth phase, and the new team members will help us on the path as we keep climbing.â
This growth, and the recently announced strategic alliance with TFPA, reflects TSGâs new mission of empowering the advancement of the global payments ecosystem through data, knowledge, and intelligence. Since its inception, the firm has served over 1,000 clients, including Fortune 500 leaders and dozens of the world's most valuable brands.
Prices that consumers pay for a variety of goods and services rose 8.5% in July from a year ago, a slowing pace from the previous month due largely to a drop in gasoline prices. On a monthly basis, the consumer price index was flat as energy prices broadly declined 4.6% and gasoline fell 7.7%, according to the Bureau of Labor Statistics. That offset a 1.1% monthly gain in food prices and a 0.5% increase in shelter costs. Economists surveyed by Dow Jones were expecting headline CPI to increase 8.7% on an annual basis and 0.2% monthly.
Merchant acquirers continue to reap the benefits of a bustling economy. Nuvei Corp., a Montreal-based acquirer, said its payments volume increased 38% in the second quarter, and Alpharetta, Ga.-based Priority Technology Holdings Inc. said its bank card processing volume increased 14.3% in the quarter. Nuvei said its payments volume topped $30.1 billion, up from $21.9 billion in the second quarter of 2021. E-commerce represented 87% of that volume. Nuvei has made inroads in capturing share in the online-gaming segment.
When it was unveiled in 2019, Apple touted its new credit card as a gamechanger with unheard-of levels of simplicity and transparency. Behind the scenes, however, the cardâs rapid growth and the new platform built by Goldman Sachs to service it created difficulties, resulting in failures more reminiscent of a traditional issuer than a customer-first disruptor, according to people with knowledge of the matter. Goldman struggled to handle a bigger-than-expected influx of disputed transactions, known in the industry as chargebacks, according to the people.
Business payments have been the caboose on the innovation train, with many companies sticking to paper modes such as checks, partly out of inertia and partly to stretch payment times out as much as possible. But the digital wave of the past two years is boosting demand for consumer-style digitization in business payments, as is economic pressure to use digital processing as means to more closely manage cash positions. The tech trend and the sheer size of the business payments market are providing opportunities that are too good for payment companies to pass up.
Cryptocurrency lender Hodlnaut is the latest firm to respond to tumultuous market conditions by halting withdrawals. In a post on its website, the Singapore-based company announced that itâs freezing withdrawals, token swaps, and deposits due to an uncertain economy that some say triggered a âcrypto winter.â
Capital One Financial has added REI Co-op, the outdoor equipment retailer, to its expanding clutch of co-branded retail credit card partners that includes Walmart, Saks Fifth Avenue and Williams-Sonom. Capital One will maintain some core features of the existing REI card,a Mastercard which was previously issued by U.S. Bank, including 5% back on purchases at REI's 177 stores. It's bumping up rewards on all other purchases to 1.5% from 1%, the company said in a press release.
UK challenger banking app Dozens is to wind up its consumer operations, citing the domino effect of covid and funding constraints. Launched in 2019, Dozens offered users a slew of budgeting and analytics tools to help them save and invest more efficiently. The firm claims to have some 60,000 customers using its app and has raised ÂŁ28 million from Hong Kong-based backers, as well as a ÂŁ3.5 million crowdfunding round on Seedrs.
In the last couple weeks, Ukraine has sought to streamline its donation process by creating an integrated platform that accepts all types of donations, including both crypto and fiat currency. As explained by Finance Magnates: âIn addition to the expanded list of supported coins, the new initiative enables donors to choose where to allocate their funds, making it different from Ukraineâs previous fundraising attempts. There are currently three areas for users to choose from: defence and demining, humanitarian and medical care, as well as reconstruction of Ukraine, according to the websiteâ.
Weavrâs Financial Plug-ins service a wide range of use cases with unrivalled simplicity. In a matter of weeks, businesses can be up and running, providing the financial services that their customers require. In comparison to traditional Banking as a Service (BaaS) solutions, Weavrâs products allow this process to happen at a fraction of the speed and cost, significantly lowering the barriers to market entry for innovative minds across sectors.
Itâs not a great time to be a disruptor in retail. For new companies that hope to challenge big-name brands, a mix of high inflation and changing trends have upended many of the consumer patterns seen during the COVID-19 pandemic. E-commerce and tech retailers are in a particularly tight situation, as some consumers return to in-store shopping. While many of these brands experienced skyrocketing sales and online demand over the past few years, most have quickly been brought back down to Earth.
Well, itâs that time of year againâŠ.halfway-earnings calls time, that is. Dire warnings from Walmart and mass layoffs at Shopify dominated the first few rounds of calls, but marketplaces like eBay, Etsy, and Amazon were among those that outperformed analyst projections in Q2, due in part to third-party sales and ad spending.
Harbor Freight Tools led an annual listing of the fastest-growing retail companies. Compiled by Kantar, the National Retail Federationâs 2022 Hot 25 Retailers List is determined by increases in domestic sales between 2020 and 2021. With a 93.4% increase, Harbor Freight topped the list, followed by Inditex, with 76.60% sales growth. Rounding out the top five were Burlington (65.80%), Dillardâs (53.20%) and TJX Cos. (51.30%).
Democratic Sen. Dick Durbin finally found a Republican partner to join him in taking on the nationâs big card network companies, Visa and Mastercard. Durbin (D-IL) joined with Sen. Roger Marshall (R-KS) last month to introduce the Credit Card Competition Act of 2022, which would require credit card networks other than Visa, the largest network, and no. 2 Mastercard, be available to merchants for routing such transactions. Industry players involved in the years-long war over credit and debit card fees say there could be $100 billion at stake this time around as banks and credit unions try to hang onto more fees from credit routing, and as retailers and merchants fight to lower those fees.
The crypto market is unregulatedâa tech-driven Wild West in which the rules of traditional finance do not apply. If you were Ishan Wahi, however, you would probably not have that sense. Wahi worked at Coinbase, a leading crypto exchange, where he had a view into which tokens the platform planned to list for tradingâan event that causes those assets to spike in value. According to the US Department of Justice, Wahi used that knowledge to buy those assets before the listings, then sell them for big profits. In July, the DOJ announced that it had indicted Wahi, along with two associates, in what it billed as the âfirst ever cryptocurrency insider trading tipping scheme.
In what is its first investigation into cryptocurrency markets, the Federal Trade Commission (FTC) is looking into the Bitmark currency exchange over the December 2021 hack that cost consumers $200 million. According to an FTC order filed Wednesday (Aug. 11), the agency denied a request by Bitmart operators Bachi. Tech Corp. and Spread Technologies LLC to quash the agencyâs attempt to compel them to reveal information. "The investigation includes inquiries about Bitmartâs representations concerning its advertised exchange services," the FTC said in the document.
The world of online shopping was long immune to inflation until Covid-19 turned everything upside down. E-commerce prices began rising in June 2020, beginning an unprecedented stretch of 25 consecutive months of increases that underscored the severe price pressures hitting the US economy. That streak has finally ended. Online prices declined by 1% year-over-year in July, snapping a string of nearly two years of persistent inflation, according to a report released Tuesday by Adobe.
Instead of continuing to slow down as expected, the U.S. jobs market exploded in July â adding 528,000 positions and finally recouping all of the jobs lost during the pandemic. The figures from the latest Bureau of Labor Statistics report represent a dramatic reversal from recent months. June added just 372,000 jobs, down from 390,000 in May and 428,000 in April.
A report released by the Labor Department on Tuesday showed U.S. labor productivity continued to slump in the second quarter of 2022, while labor costs continued to soar. The Labor Department said labor productivity tumbled by 4.6 percent in the second quarter after plummeting by a revised 7.4 percent in the first quarter. Economists had expected productivity to plunge by 4.7 percent compared to the 7.3 percent nosedive that had been reported for the previous quarter.
The Bank of America Institute published a new article that shows consumer spending continues to increase in July but some consumers are feeling the effects of rising rents. Bank of America internal data suggest median rent payments increased by 7.4% year-over-year in July. That said, there are many reasons to remain positive about the steady resilience of US consumers: lower gas prices provided some relief to consumers in July, and promotional events from retailers boosted spending on goods. Additionally, householdsâ deposit and savings balances remain elevated and consumers have not yet shown signs of increased borrowing.
Jack Henry & Associates, Inc. announced that it has entered into a definitive agreement to acquire Payrailz, adding the company's next-generation digital payment capabilities, including real-time person-to-person (P2P) payments, to Jack Henry's payments ecosystem. Based in Glastonbury, Conn., Payrailz provides cloud-native, API-first, AI-enabled consumer and commercial digital payment solutions and experiences that enable money to be moved in the moment of need, and banks and credit unions to successfully compete with industry disruptors.
Western Union announced an update to its existing partnership with Visa, expanding its integration with Visa Direct, Visaâs real-time money movement network, into Western Unionâs United States network. Western Unionâs integration with Visa Direct was initially activated across Europe, allowing Western Union customers in more than 20 countries to send and/or receive funds directly to eligible Visa debit card holders.
BlueSnap, a global payment orchestration platform committed to helping B2B and B2C businesses accept and optimize digital payments around the world, announced it will now be a provider for KeyBank's US gateway functionality. BlueSnap's payments orchestration platform will be available for the bank's middle market and institutional clients in the eCommerce space. With BlueSnap, KeyBank can offer its clients more robust payment options with additional functionalities.
Unit, the banking-as-a-service platform that empowers companies to embed financial services into their products, today announced a strategic partnership with Thread Bank, a leading digital-first bank based in Rogersville, Tennessee. Companies will now be able to easily embed a complete set of banking services into their productsâincluding accounts, cards, payments, and lendingâusing a single platform, in a matter of weeks.
"In collaboration with Thread, Unit will be able to empower more companies to offer unique banking solutions based on industry-leading technology and partners," said Unit CEO and co-founder Itai Damti.
Financial technology leader FIS has released its annual Global Sustainability Report which highlights the companyâs progress in advancing environmental, social and governance (ESG) issues over the past year. FIS made continued progress last year in several key areas, including its efforts to drive financial inclusion, advance the workforce of the future, foster inclusion and diversity and help communities thrive.
With another innovative RTPÂź Network solution, U.S. Bank can now provide loan funds to auto dealers instantly after the loan contract is finalized by the bank. Following a successful pilot completed in June, U.S. Bank has already enabled more than 800 auto dealers to receive funds from auto loans via a real-time payment. The bank expects to deliver the solution to more dealers in the coming months as the bank continues to improve operational efficiencies for auto dealers.
Avalara, Inc., a leading provider of tax compliance automation for businesses of all sizes, announced it has entered into a definitive agreement to be acquired by Vista Equity Partners (âVistaâ), a leading global investment firm focused exclusively on enterprise software, data, and technology-enabled businesses, in partnership with institutional co-investors.
The data aggregator Plaid and Wise, a U.K.-based provider of cross-border payments, have forged an agreement through which Wise will work directly with the 6,000 fintechs that are Plaid customers. This means Wise's 13 million customers can connect their Wise account directly to fintechs like Venmo, Chime, Truebill, Acorns and Betterment and move money back and forth. They will no longer have to link to a traditional bank account or transfer money to and from a bank account to use fintech apps for things like person-to-person payments, investing or personal finance.
