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This week: Earthport, Facebook, IBM, Mastercard, PayPal, Revolut, Transfast, Visa
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New data, new insights on international payments. Every week.
 

Mastercard switches up

Mastercard dropped their Earthport bid last week and plans to purchase Transfast instead. This instantly reduced the value of Earthport shares. Visa will now close the deal at 37p/share, 26% below the peak price in their recent bidding war but 30% higher than Visa's initial bid. 

So who wins from all this?

  1. Definitely Transfast (who we spoke to this week). 
  2. Earthport shareholders - but not as much as they'd hoped. 
  3. Visa, who ultimately got its mark (and really, what's $100m more to a $330bn company?)
Better the devil you know
MasterCard already works with Transfast, providing payout services, which likely gave it an edge. Whilst both Earthport and Transfast offer access to a global banking network, Transfast has a strong focus on emerging markets. 

The big questions:
  1. Both Earthport and Transfast have been offering access to their network to third parties. Will Visa and Mastercard choose to now restrict access and use this as a competitive advantage? 
     
  2. Can we forecast the direction of Mastercard Send given the emerging market strength of Transfast?
     
  3. Visa stated in its offer document it was looking to Earthport to develop its marketplace capability, something Mastercard picks up already with Transfast. Is this a signal of a new marketplaces focus for both Mastercard and Visa?
     
  4. If it wants to gain a true competitive advantage over Visa, why didn’t Mastercard buy both Earthport and Transfast? 
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If you work in operations, compliance, treasury, or product and want to be part of one of our industry reports, please get in touch below. All submissions welcome.
 
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Revolut receives an apology (of sorts)

The Revolut story continues to unfold with the group quickly trying to grow up - this week by hiring some very experienced finance executives. As we reported last week though, don’t believe everything you read. Earlier this week, The Telegraph issued a clarification for its article, stating they:
 
“wrongly suggested Revolut had been accused of violating banking rules by switching off part of its anti-money laundering systems.” 

You should read the mainstream press -  they do a great job amplifying what everyone does in the sector. Just make sure you read us too. 
 
Access our 35 Page RegTech and Payments Report

Pricing insight #7

A few weeks ago we profiled the introductory transfer offers some firms are using to lure new customers. We continue to track this. Another tactic firms are employing are FX margins better than the wholesale rate (effectively cash back) for first time transfers up to a threshold amount. These are employed very selectively illustrating the battle over certain hard-fought corridors.

Want to know who this company is? Think it's time to create a new pricing strategy? Get in touch.
 
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On our radar this week:
Curated by FXC Intelligence's Team 
Facebook crypto value

Barclay's claims Facebook's crypto coin could be a $19bn revenue opportunity

CNBC
PayPal invests in Latam

$750m goes to Argentinian marketplace and financial firm MercadoLibre 

Techcrunch
And PayPal goes for speed

Instant payments in the US. Speed increases in importance.

cnet
US Credit Unions turn to blockchain

Credit Unions the next sector to seek blockchain efficiencies.

Forbes

Missed the last few weeks? Revolut, Digital Valuations & RegTech

How RegTech impacts international payments, our 35 page report (here)
What to make of Revolut and RegTech (here)
Is $4bn a crazy valuation for TransferWise (here)
Sign up to our newsletter - form your opinion
Have a wonderful week,

Daniel
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