1009. News: How the AWS outage rocked fintech

28:03And we're one of the founding sort of members of the visa A2A scheme that's launched in the UK. Some news on that coming in the next few weeks. Maybe we'll come back and have a chat about what we're doing with that. And, you know, that's going to enable account to account payments in a consumer to business flow. So what Pablo was describing there. So you suddenly expand that recurring payment into being able to pay bills, maybe pay subscriptions, and at some point down the line, maybe get into the e-com space in there. So you So suddenly starting to see the different options that are available in that.

28:44I think the other, so that sort of one thing is just from a product perspective, how do we bring some of those to market? And then how do we work with our European stakeholders to bring similar sort of capabilities? There's already, you know, Gyro API in Germany is looking to do something around the recurring. So, or is doing something around the recurring scheme. So how do we get involved in those things and make that available to our customers? I think that is really important. Then just the hygiene stuff, which is continually looking at user journey. How do you make that as simple as possible?

29:17There's a lot of requirements on us from a regulatory standpoint. There's more of those coming down the line. How do we build that in an intelligent way that means that you build trust and confidence with the end user, but actually you make that journey as simple and easy as possible, that the chip description was it's invisible. The consumer doesn't really know they're using open banking, which is phenomenal, but doesn't actually help me from an adoption perspective. Because if you don't know you've used it, next time you see it, you don't necessarily know what it is. So we've got to get over that.

29:46It's so good over here that if you come across it somewhere else, you might not actually realize that you've used it before. So we've got to work on how we actually transition between those two things as well. It's so funny, that open banking branding problem. And actually at the Open Banking Expo, it was interesting to see the expos called open banking, but almost no one was referring to it as open banking. It was pay by bank, you know, and in some ways that is better because it feels like the industry has moved forward. But you're right, if it's that passive, then... And an account top up isn't a pay by bank.

30:16So the other thing that we're all debating is, well, what do you call that? Right. Because I'm topping up my account. I'm not paying. I'm topping up my wealth account or my savings account. It's not payment per se, because I'm sending money to myself. So how... wheat ping. What do we do? This is, you know, the nuance of the, these are the things we talk, this is two days of being at Open Banking Expo though. Very much so. I was going to say, this is some geeky open banking chat, but love it. And actually just on that note, we're going to take a quick pause here, back shortly. Hey folks, David Breer here, CEO of 11FS.

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32:27Before we dive back into the news, a quick word about our latest Insights episode. This week on FinTech Insider, we have something a little bit different for you. I recently attended the very first Money 2020 Middle East in Saudi Arabia. So lots of endless quantities of Arab coffee, which is absolutely delicious, free swag and an inspiring startup scene. To dive deeper, we're revisiting an episode from a year ago that's still spot on. Benjamin Ensor is joined by Gaia Lamperti, Ziyad Mebsut, and Remo Abadondolo to explore the opportunities and challenges of launching fintechs in the Middle East.

33:03So whether you're expanding into the region or just curious about its fintech landscape, this episode is full of insights. Check it out in the same podcast feed as this one. And now back to the news. Okay, so this next one is from BusinessWire. Paymentology launches PayCredit to power credit innovation for digital banks and fintechs. Paymentology has launched PayCredit, a cloud-first credit ledger platform designed to help financial institutions create flexible, feature-rich credit products quickly, overcoming the constraints of legacy and debit-based systems. Designed for modern credit needs, PayCredit supports revolving balances, installments, and Buy Now, Pay Later or BNPL, allowing issuers to tailor limits, interest rates, billing cycles, and repayment models.

33:47Already adopted by digital banks, pay credit helps issuers launch credit products without full lending infrastructure. This aims to create new revenue streams, enhancing customer engagement in markets where debit-only offerings are limited. So, Marusha, first off, a huge congratulations on this launch. And of course, it only makes sense to talk to you about this. Having worked on projects in the sort of credit ledger world in the past, it is sometimes fiendishly complex. I mean, tell us why that is and how you're solving that problem. Yeah, absolutely. So firstly, we are so excited about our paid credit launch.

34:26This is something that's been in the works for a long time. And one of the reasons why it's been in the works for a long time is because you're absolutely right. It is complex. It is complex, but it's also very important to get it right and to build it, you know, right from the ground up. So when you look at pay credit it's our new cloud first credit ledger and issuing platform it's purpose built so you know when we look at it it was built to help digital banks and fintechs design test and really launch modern credit products much faster whether it's revolving credit whether it's installment plans whether it's bnpl it's it's credit built from the ground up you know it's you know, really interactive and, you know, when you look at things like billing cycles, nobody cares about billing cycles, right?

35:16But it has to work and it's got to be configurable and it's got to be something that is flexible, that works with the different digital banks and fintechs that you're working with. We also focus a lot on real-time data and I think Pablo said it best. And funny enough, our very first pay credit customer is actually going to be in Mexico, which we're really excited about. and it really is all about, you know, data. It's about making sure that our customer have, you know, real-time data so that they can make real-time insights and decisions. Data also allows our customers to make the right decisions around how they want to manage their debt.

35:53And so when you look at how we've built paid credit, we have built it off nothing. We started from the ground up. You know, we didn't take a debit card platform and try to retrofit it to make sense. We really said, look, we want this to be the most configurable credit card platform where customers can gradually grow from a very simple offering like BNPL, grow into installments, and then full-scale revolving credit. So, yeah, we're excited. And it's a lot of fun to be a part of this, especially when we look at Mexico being our first country. We're very excited about the launch. And maybe just to sort of deep dive into some of those problems, because, yeah, it can be really, really hard.

36:40And I guess what you're talking about practically is that you have systems that are way more configurable, and so therefore it's just much faster to build services. But also you can build more intelligent services, I guess is what you're saying. How long would it take typically to... Is there like a benchmark for how long it would take typically to put something like this together before this new world? Yeah. I mean, if you look at it right... A debit card program, we can spin up in, you know, four to six weeks. It's really simple. It's very easy to implement. Whereas credit card programs typically took six months to a year on average, right?

37:16And it was because you're trying to square peg round hole, right? You're trying to create different interest rate calculations in a debit card world. It just didn't make sense. And so it was a lot of trying to like make these nuts and bolts of all different sizes fit and they just never really fit well. And so now when we look at how quickly it is to launch a credit card program, you know, we can create, you know, testing within minutes. As in our customers can test out our APIs, create a ledger, create an interest rate calculation, which is specific to their market in minutes. They can test out hundreds of transactions on our UAT simulator, you know, within days.

38:01So now what we've done is we've taken a 12-month project and we've made it, you know, six months max. And if you look at the customer in Mexico, it's actually less than three months. So we're really, really excited about just shortening that timeframe to get a customer live on credit. That's incredible. I'd love to bring in our other panelists on this because I guess what we're talking about here is the march of real-time data and of digitization and open banking is also an important part of this. I mean, is this basically saying like, you know, we could eventually reduce the reliance completely on legacy banking systems?

38:40And, you know, Ian, what do you think? That's a tricky one sat in the building that I'm saying. Maybe I shouldn't have done to you. I think that what's super exciting, and actually, I was really interested to hear what Pablo was talking around, the initial use cases being more around this area than perhaps where they are sort of in Europe. And we do see some, we do see open banking data used today in lending decisions. Is it everything it could be? No, it's not. You know, there's still a huge amount of legacy. There's still a huge amount of looking in the rearview mirror to see what happened. six months ago, rather than looking at what's happening today, into that data and making decisions on it.

39:25And we have access to and the ability to look at the data today and create dynamic lending decisions. It doesn't, you know, if you've got people who are typically refused credit because they fail because of some legacy assessment that's been made, actually we have the information today to be able to look into their accounts and make dynamic decisions about how maybe they access credit and access other capabilities and facilities that they haven't got today. So I'm super excited by what is coming down the track. And what it really requires is just a bit more understanding, I think, from the risk teams in some of these organizations on how they use the data and how reliable it is and what insights they need to pull, whether that's using machine learning AI, AI, you know, with more AI getting into some of the models that we have.

40:21Yes, we've got to make sure that's done properly and in a way that builds trust with the end users. But I think, yeah, huge possibilities coming down the track for how we use this in a thoughtful, combined way. And if I can add to that, Ian, it's such an interesting point because, for example, we work in a lot of emerging markets, whether it's Africa, whether it's LAC, whether it's APAC. And a lot of customers, like you said, underserved, underbanked, they don't have they don't even qualify for a credit facility, right? And so what a lot of our customers are thinking is, okay, let's start off with something very simple like BNPL.

40:55Let's build financial literacy. Let's help customers to create credit histories and credit profiles so that they can gradually move up to installments and then eventually full-scale credit. So it's really about creating the thought process around how do we make credit more accessible to everybody by having these different layers, these different options of where is your customer right now? How much of a credit risk are they? Are we open to trust our customers and start to build out their history? So for us, it's emerging markets are key to building our credit. If we look at Africa, the penetration rates, and especially when you look at the penetration rates across male versus female credit adoption in Africa, it is, it's scarily shocking.

41:44I won't even give you the stats, but those are the things that we need to change, right? And, you know, when we look, one of the reasons why we're so passionate about doing this, you know, launching paid credit is because it really is going to not just bring in revenue for our fintechs and our banking partners, but it really is changing the economic landscape across emerging markets. So, yeah, it's just so interesting. Yeah, it's fascinating. Yeah, yeah, banking the unbanked, as you said, Pablo earlier. It's a huge, huge potential opportunity coming up. Anything to add? Yeah, no, absolutely. I think, you know, look, when we think about, you know, innovations like pay credit, I think there's a, you know, the kind that the region needs, right?

42:29And I think, you know, if you look at especially emerging markets, the way, you know, oftentimes the way people enter the money wheel is through credit, right? That's how that's how people enter the money wheel that's how people enter the prosperity wheel right so if they don't get access to a loan or you know whatever type it may be they can't invest they can't prosper right so I think that's particularly relevant in you know in the market we serve and you know other markets like Marusha was mentioning Africa and so on but I think you know it's also relevant you know not only thinking about you know how can we kind of create the you know, the engines or the models to, you know, kind of issue credit, but it's also like, you know, what's actually feeding those models, right?

43:18And I think that the lens that, you know, we bring here at Belvo from, you know, our work in Mexico and in Brazil is that, you know, even though, you know, still a very large portion of the population is unbanked, underbanked, or even Even if, you know, some, you know, you know, say 40, 50 % of folks still have, you know, a bank account today, which one might think that it's, you know, a relevant number, you know, the actual principality or the transactionality that you get on those accounts is very slim. Right. So even if you have a bank account, like you can't really tell, you know, if that person's good for a loan or not.

43:57And, you know, forget about, because they don't have a loan, forget about, you know, getting a hit on the credit bureaus, right? So what you end up having is, even if you have these models or these innovations, if you don't have a way of making the invisible visible, it's not going to work for you, right? So I think that's kind of actually one of the problems we've been solving for a lot of our customers, which is, okay, so today we're serving X percent of the population. We've never really thought about, you know, going beyond traditional data, right? And this is where kind of our concept of open finance kicks in, which is, as I was mentioning earlier, like tapping into additional data sources and turning them into, you know, insights such as, okay, so I might be able to connect to the social security database, for example, or the, you know, the tax database.

44:52and with that, you know, I get into the weeds and I'm able to tell you how much money this person is actually making and if they're good for a loan or not, right? So I think, you know, anything that, you know, helps and fosters better decision-making, better underwriting, more loan issuing with, like, better insights, a higher percent welcome, but obviously you need, you know, The models are only as good as the data that powers them, right? Yeah. It's almost like that hunt for data to help bank these people is driving innovation itself. And actually, Pablo, that's a really good segue into the next news item we have.

45:34And this is from Finextra. Revolut gets Mexico banking license. That was a segue. Revolut has received authorization from the National Banking and Securities Commission. so that's CNBV, and the Bank of Mexico to operate as a multiple banking institution, enabling full banking operations in the country. This move positions Revolut to tap into Mexico's significant cross-border remittance market, which saw a record$63.3 billion in remittances in the previous year. This move aligns with its global strategy to invest£10 billion and create 10 ,000 jobs, targeting 100 million customers by mid-2027 and entering 30 new markets by 2030.

46:19So no small feat. Meanwhile, Revolut continues to face delays in securing a UK banking license, a key milestone for expanding its domestic banking services. So first off, I mean, I think it's important to mention that, you know, Revolut has been operational on Mexico for a few years now. I I think it's like 2021 or 2022 when it started opening operations there. But Pablo, what's your view? Why Mexico as that landing point in Latin America? Yeah. You mentioned, I mean, Mexico being, you know, a market that Revolut was, you know, operating in or started, you know, kind of working on since 2021 or 2022.

47:05Like I'm actually a former Revoluter. I was an early employee at Revolut and in my time, so in 2017, 2018, folks were already working on the Revolut Mexico expansion, right? So that's how far back it dates. but I think when it comes to international expansion, I think the team at Revolut doing a terrific job there it just comes to what big markets are there out there what are our opportunities for our unique product positioning and once the stakes are there we go all in, right? And I think in Mexico you find a lot of the right ingredients. You know, it's a huge market, right? So second biggest country in Latin America, massive proportion of the population still unbanked, underbanked, very strong banking lobby, right?

48:06So the top banks, top five banks account for, you know, 60, 70 % market share. One single bank BBVA accounts for 35, 40 % of deposits and loans and assets market share. So very high concentration, right? But still, on the flip side, a market that's very ripe for innovation, ripe for disruption. And you're seeing over the past couple of years how there's been a very big take up, especially with younger generations with, you know, digital first product offerings. And, you know, Revolut is not the first neobank. And, you know, there's a handful of neobanks there and many homegrown and many, you know, regional grown that have been operating there for a while.

48:55But just the size of the opportunity, size of the market is just so big that it's a very, very attractive market. And I would say in the digital space, very much still up for grabs. Right. Yeah. It's also such a huge population. I feel like you touched on it a little bit there. Is there something about the regulator as well that makes Mexico more open for business maybe than some other countries in Latin America? Is there a real kind of push to boost the fintech sector that you see? Well, I mean, look, I mean, we're also a regulated business in Mexico on like the payment side of the business, I will tell you that, you know, the Mexican regulator, as you know, from experience working in other countries, like is not particularly, you know, friendly when it comes to fintech or even when it comes to, you know, you getting a banking license from scratch.

49:52But I guess in Revolut's case and, you know, in other, you know, upstarts or, you know, digital banks that have gotten their licenses over the past few quarters or years. You see Nubank, for example, they started with a kind of like a lending type of license where they could issue some products and now they fully transitioned to a banking license. You see Mercado Barro also transitioning to a full banking license. I think the requirements are clear and if you kind of file your, if you submit your file and everything kind of makes sense, you check all the boxes, you'll get the license, right? So there might be some delays here or there, but I think in the specific case of Revolut, you might not get the level of scrutiny that you might get in other parts of the world where you might have already been operating for a while.

50:48You're maybe like a larger digital incumbent. I think here in the case of Mexico, Revolut just starting from scratch, They had everything set up properly, did a great job working on all the basics, on all the infrastructure, on getting everything set up. And they got it by just following what the regulator said. But by no means, I would say the regulator in Mexico is particularly friendly, especially if you compare them to Brazil, for example, where the regulator is much more pro-innovation. they're much more in favor of digital banks kind of growing and putting pressure, quite frankly, on legacy players and on incumbents as well.

51:35Yeah, that makes a lot of sense. Thank you so much for that run through, Pablo. It was fascinating. And on that note, we're just going to take a quick pause here. Back shortly.

51:48Okay, now for a quick look at one more newsworthy story this week that we don't have time to cover in full, but we think you will find just as interesting. And this one is from Financial IT. Zilch and Plaid partner to integrate open banking into repayments. Zilch has partnered with Plaid to integrate open banking into its repayment experience, allowing customers to use the pay by bank method for one-off repayments directly from their bank account. So that's exactly the conversation that we've been having today. The integration leverages Plaid's virtual account capabilities, enhancing settlement tracking and refund functionality, which simplifies reconciliation and reduces overheads for Zilch.

52:23The partnership comes as open banking usage in the UK reaches 15 million users, so that's nearly one in three UK adults, indicating increasing customer uptake and the potential for scalable repayment innovations. Zilch plans to release Zilch Pay in the first half of 2026, a one-click button that will integrate its app, digital wallet, and card at checkout, enhancing the shopping experience for customers. So to give us more information on this partnership, we have a voice note from Joe Zender, Chief Product Officer at

52:55Zilch. Hi, I'm Joe Zender, Chief Product Officer at Zilch, the consumer payments platform, and I'm excited to share that we have just announced a new partnership with Plaid, one of the world's leading open banking platforms. Together, we're integrating open banking into Zilch's repayment experience, giving our over 5 million registered customers an even smarter and more flexible way to manage their payments. With this partnership, Zilch customers can now use Pay by Bank for one-off repayments, allowing them to repay directly from their bank account in just a few taps. It's fast, secure, flexible, and completely frictionless.

53:29and the timing is ideal with open banking adoption continuing to soar in the UK. At Zilch, our mission has always been to make payments smarter, simpler and more affordable and partnering with Plaid is another major step towards that. And we won't be stopping there. Next year, we're launching Zilch Pay, our one-click button that brings Zilch directly to online checkouts so you'll be able to pay, earn rewards and stay in control of your spending all in one seamless experience. This is all part of how we're building the consumer payments platform that powers the future of commerce. And finally, now time for something a little bit different and maybe a bit weird from the world of business to finish this week's show.

54:11This one is the FinTech Halloween finisher. Which FinTech would you bring back from the dead? Discuss. There are many. So first off, that is a large graveyard. Very, very large graveyard. some for very good reasons um some unfortunate we were we were it was a really interesting one i posed it to the office actually a bunch of i went around the office uh polling for ideas uh because i try i think i try and forget them when they've gone and then i had a little google and if you google how much money was invested in failed fintechs over the last five years that's a scary number that's a lot of noughts at the end of that and then the next qualification was which Which ones can I actually say because they didn't get shut down because they were so illegal that they were found to be so bad that they had to go and the list, the list then gets quite, quite short.

55:05But the top one, I, mine was very boring. Well, mine was safe. So I really liked the Zing travel app mainly because we provided the account funding for it, but it was a very cool use case. I liked the UX. I thought it looked brilliant, but it just didn't work economically for them. whatever, they decided not to do it. But I thought as a thing, it looked cool. It worked really well. But the top scoring in the office was actually football index. I don't know if anybody remembers football index. So where you could, and I didn't know what this was, I had to go and I had to ask too, but you could effectively buy a shirt.

55:43It was like, well, I'm going to put it in in simplification. So a bit like fantasy football, you sort of invested in the players that you thought were going to do well. And then if they performed well, you got a dividend on their performance. So you could, for the football-loving fun investor, it was quite good fun. Although everyone I spoke to didn't do particularly well out of it. But it definitely scored high on the fun, entertaining fintech. And it didn't get shut down too badly. So I felt like I could raise that one. I committed a big podcast sin just now and Googled it.

56:27And it does indeed say, Ian, that lots of people are trying to get their money back. So, yeah, that's not a great example. It's not ideal, but there you go. That was the one that people thought was fun. So, Zing was my safe one, where I said, actually, that was the one that I really liked. And Ian, I'm probably going to jump onto that bandwagon as well, because you're right, it was just such a phenomenal, it just looked great, people. Honestly, when you saw it, you're like, oh, this is an amazing customer experience. So definitely Zane, but going down that track, I'll say a couple of things, right?

56:59There are so many digital banks that started off too early, right? So if you look at Simple, if you look at Ingers, you know, prior to COVID, there was some amazing digital banks that, you know, they were doing branchless banking and all this cool stuff. And I think the markets just weren't ready for them. They had great interfaces. They understood the customer experience. Customers just weren't ready. And I think COVID really helped to catapult that need for digitization in the consumer and changing consumer habits and behaviors. And I think if you did get banks like Zinja's or Simple Comeback, they might actually do really, really well because they had a really good understanding of what customers needed in a digital world.

57:39So those would be the ones that I'd bring back. Oh, that's such a profound point, Marusha. Yeah, there's definitely a timing aspect to so much of this. Yeah, we had Simple as well. I just asked a few people as well before this, and a lot of people are like, oh, Simple. Yeah, that could have been a good one. Any thoughts, Pablo? Yeah, on my end, I mean, I'll look at the U.S. a little bit and maybe bring back one of the, I guess, OGs of fintech, I think before fintech actually existed. and I mean, I'll say Mint.com. Ah, Mint. Right. So, yeah. So, you know, obviously, great product and, you know, kind of PFM-like product before, you know, PFM ever existed or before FinTech ever existed.

58:28You know, known to be acquired by Intuit some time ago and, you know, shut down, merge, slash, you know, whatever with Credit Karma. And yeah, I lived for a while in the US, was an avid user of Mint.com, and it was sad to see them go. But users are like massive fans, right? I mean, I still haven't found a PFM app quite like Mint. Yeah, I'm glad you raised Mint, I'd forgotten about that. You're right, because I think maybe they made fintech, because they were the fintech before fintech, actually. so it's really worth a shout out You could probably do a whole podcast, couldn't you? Definitely I actually went and did some prep on one of these fintechs that didn't quite make it which belong in the graveyard for some very good reasons one of the controversial, just in chatting to some people before this, one of the controversial is Nutmeg in the graveyard?

59:28Is it in the graveyard? It was just acquired by JPE I'm a full disclosure, I'm a Nutmeg customer love Nutmeg They were acquired by JP Morgan and they're just retiring the brand. So at least the brand in some ways is dying. It's just quite a fascinating story about what's happening in that sector. So I got to say, everyone, we actually ended up by talking way more profoundly about that than I thought we were. So that's brilliant. And on that note, that wraps up today's spooktacular fintech news. Thank you so much to today's guests. Where can people find out a little bit more about you and your companies, Ian?

1:00:10LinkedIn, obviously, and then tink.com if you want to know more about tink, but give us a call. Awesome. And Marusha? So definitely our website, paymentology.com. Go to the Issuer Academy as well to see our podcast and of course on LinkedIn. Always happy to connect. And Pablo, where can we find you? You can find us on bell.com and also on linkedin.com slash bellbofinance. Amazing. And as for me, it's on LinkedIn at DavidBG or 11FS.com. Thank you so much for listening to today's Fintech Insider. If you like what you heard, please make sure to follow us on your favorite podcast platform of choice.

1:00:47And if you really like what you've heard, why not share the podcast with a colleague or friend? Go on, do it. As always, if you want to join the conversation, find us on social media just search for 11fs or fintech insider or email podcast at 11fs.com thanks very much and goodbye