1028. News: Flutterwave buys Mono, PicPay files for a US IPO, and Jamie Dimon is ready to share JPMorgan’s ‘secret sauce’

28:14Yeah, 100%. So like, sometimes you put your personal bias aside to play the game on the field. So if Jamie Dimon had his personal bias about what crypto can do, what crypto cannot do, and maybe his even long term vision around how it would all converge back to looking like Swift. At the moment, the game on the field is, there is a short term opportunity in the crypto and stablecoin space. And all my investors, my shareholders are asking, what am I doing about it? So being able to do something about it in the short term and just tell them that you're thinking about it is not like you have, you apply inside it.

28:56You know, it's very useful. So I expect to see a lot more, you know, cautious involvement in crypto. And, you know, they're doing the token thing. They're doing a bunch of things, but I don't think they would ever fully become like a community bank that's trying to get business off the back of banking, crypto, fintechs, and whatnot. So all of that is there. Love it. Love it. All right, great. Well, look, on that note, we're just going to take a quick pause here, and we will be back with you very shortly. Hey, folks. David Breer here, CEO of 11FS. Here's something you might not know about me. I get a lot of people trying to impersonate me online.

29:37Fake profiles, scam emails, the lot. And a big part of that comes from data brokers. Hundreds of them quietly collecting and selling your personal information. Your phone number, email, home address, job title. All out there and all fueling identity theft, scam calls and spam. If you've ever searched your own name online, hands up, who hasn't? You'll know how exposed you really are. That's why we've partnered with Incogni. They contact 230-plus data brokers and tell them to delete your information properly and legally under GDPR and CCPA. Doing it yourself would take hundreds of hours. Incogni automates the whole thing and keeps working with repeat removal requests if your data reappears.

30:20I tried it and within days saw brokers deleting my data. You can even protect your family members too. FinTech Insider listeners get 60 % off an annual plan. Just head to incogni.com slash fintechinsider and use code fintechinsider. And yes, it's risk-free with a 30-day money-back guarantee. You'll find the link in the description.

30:44Now a quick break from the headlines to spotlight our latest Insights episode, and it's a big one. Netflix, you've probably heard of them, right? Well, they've got over 300 million people paying every month to watch shows such as Stranger Things and, of course, Emily in Paris. So what does it take to handle payments at that scale? Well, we sat down with Netflix and their partner JP Morgan to find out. It's a must listen and you can find it on the same feed as this episode. And now back to the news. Our next story is another big move. This time, the first IPO of the year. Now this headline comes from payments.

31:19Brazilian fintech PicPay files for US IPO as profits surge. So PicPay, the Brazilian mobile banking and instant payments provider, has filed for a US IPO, making it the most exciting Brazilian listing since Nubank's blockbuster debut. Found in 2012, PicPay started out focusing on instant payments and QR code transactions, but over the years it's grown into Brazil's second largest digital bank by customer base, now serving over 66 million clients and offering an array of financial products such as credit cards, cryptocurrency trading loans bmpl services digital wallets investments and insurance picpay's latest ipo plans come four years after the company abandoned a previous attempt to list on the nasdaq um miguel i know this is something that you've looked at um in some detail so do you want to um maybe bring it bring it to life for us a little bit yeah absolutely i mean obviously this is a story about PicPay and the success that they're having in the last 13 years since the company was founded.

32:30But it's also a story about Brazil. And I think it's yet another reminder for everyone to realize that there are maybe five, maybe up to 10 economies around the world that can produce multiple multi-billion dollar fintech companies or just businesses in general. But let's zoom in on fintech. Brazil, you know, the list is growing. Everyone knows Nubank around the world. Now people are starting to hear about the other ones, right? And PicPay being one of them. I, as you mentioned, I've gotten the chance to interview the CEO, Eduardo Shadi, at their offices, at their headquarters during one of my trips to Brazil, to Sao Paulo last year.

33:24It's a super dynamic office. The way they're building things is obviously top of the line. But the interesting part of the story here is that they started as a payment company. They were doing PIX before PIX was launched. Almost like Venmo in the US for a lot of people who are familiar with it. And then PIX got launched nationally for everyone, mandated by the central government. So what did PicPay do? They essentially reinvented themselves by launching a credit business, which is now close to 50 % of the revenue and is what has gotten them over the line from being an unprofitable business to turning a profit for the last couple of years, right?

34:22Now, they hired, obviously, a very experienced credit team. You don't get that done successfully without the right people. But yeah, I mean, you guys always said for the last six years that I've known you, credit makes the world go round. And this is another example, right? But yeah, it's an amazing story. I'm watching it very closely. And let's see when they actually go out. It should be in a couple of weeks. I mean, well, look, we asked you to bring it to life. And you've definitely done that. I think there's a lot of excitement about this one. um a couple of points i suppose that you made that really sort of resonate it's so interesting that it's a success story but it's a success story sort of built on like resilience and as you say when when picks got launched i mean that could have been the end of them but the pivot and profitability and all of that sort of stuff coming after is is really quite an achievement but then sarah i think the other point that's really worth maybe reinforcing is um miguel's point about brazil and just the scale.

35:27I mean, it's staggering that you can be the second largest digital bank by customer base with a customer base of 66 million clients. Yeah, I mean, you know, NewBank was one of those, one of the first ones that digital banks that we first really sat up and took notice of at 11FS, arguably a long time after we should have done. But back in the days, you know, when I was working with you guys, and I still remember when we spoke to their founders and we asked them kind of like, you know, what's the secret to your success? And they said, well, we've got an awful lot of people and we've got some of the worst financial services infrastructure in the world.

36:01And so that gave us a really, really good opportunity. And to Miguel's point, from what I remember, the early conversations with them were particularly around credit, actually, and about how in Brazil, kind of credit was just, formal credit was just priced to the point where the average person on the street couldn't afford any form of credit, whether that's a credit card or a loan. And I don't know how much that situation's changed in the interceding years. But yeah, I mean, I think the point is that when you have a huge population and a financial services sector that fails them in almost every front formally, that's going to open your way to innovation.

36:32And, you know, it's proved itself to be the forefront. As you say, they can be the second biggest with 66 million clients. I wouldn't mind being the second biggest, to be honest, with that kind of market behind me. I don't know as much about the Brazilian market as I should. But yeah, we always seem to see really interesting, innovative things come out there. And obviously they do them well because otherwise they wouldn't maintain that number of customers and somebody else would overtake them because obviously an awful lot of innovation going on over there. And by the way, the third and fourth largest, they have north of 30 million customers.

37:04Yeah, it's insane. And that's such a, but that's such a fertile ground for opportunity as well to give you kind of that, that kind of population and that kind of, and also what's interesting as well, from my point to get back to that, the failures of the kind of legacy infrastructure, if you like. but that many people are willing to take a chance on a novel product and that shows that A, that there was a big problem and B, that they're doing it right. Yeah, I mean, I suppose Benjamin, that to me is the sort of standout thing. It's like you had a huge proportion of the population who were sort of underserved by the incumbent providers, overcharged and so I suppose in that sense, there was a lot of value on the table.

37:42There was huge consumer appetite for something different and so these guys have come in and capitalized on it. Yeah, 100%. We have a similar tale with digital banking in Nigeria. And I don't know if Miguel would add Nigeria to one of the economies where people can build multi, many, you know, billion dollar companies. But what I would say is something we always keep at the back of our minds is whether the number of new fintechs offering digital banking is helping to expand the penetration of bank, you know, increasing the bank population by like net margins. Or we're just recycling the same set of 5 million people across each fintech, which means everybody just the same set of people that have piggy vests, the same set of people that have all of this and stuff.

38:28So I checked Brazil's bank population. I think it is 88%, which is quite high. But I don't know if, you know, for each of these top four, top five players, they've all contributed to expanding the number of people that come into the financial space, you know, the financial inclusion talk and all of that. So yes, I think, you know, for us in Nigeria and like many of other African countries, there are incumbents who have slept and some well-backed fintechs are taking over. Some are not even local, some are foreign, like Ope in Nigeria is a Chinese company, but they are leading in the personal digital banking space.

39:10And then we now have other guys like MoneyPoint, ETC. Yeah, yeah, absolutely. If I can quickly add, Benjamin. Yeah, please. So I'm trying to pull the numbers exactly, but it was not 88 % back in 2012. I believe it was the number that I'm seeing now, it was about 56 % back when PecBait was getting founded and which is close to the date when Nubank was getting founded. So they've, in Brazil, they've expanded the bank population by 30%, which is about 60 million people, maybe more, right? So it's insane and incredible what the fintech story has done for the people of Brazil. And this has been mentioned many, many times.

40:04But there's also another player here behind the scenes, and that's the central bank, because the Brazilian central bank is just a force pushing forward innovation and setting up guidelines that encourage fintech experiments. So that's also an interesting part of the story that has to be constantly celebrated. And Miguel, one sort of final question on this one. I know they sort of abandoned a previous attempt to go public a number of years ago. Do you think they're just in a better place now in terms of actually sort of going through with that? Absolutely. They are actually glad they abandoned the previous plans.

40:57They didn't tell me that, but I'm pretty certain they're glad because their number, they were a loss making institution back then. So their numbers actually would have suffered in the public market, right? Their stock would have been extremely rocky. Whereas now, you know, they can defend themselves. They can stand on their own two feet. They're profitable. So, yeah, just vastly, vastly different organization. Yeah, I mean, you're looking at$1.3 to$1.4 billion in revenue and income and sort of roughly sort of 58 to$60 million in profit. So, I mean, yeah, as you say, just that timing, the position that they're in, it makes a ton of sense.

41:45All right, I'm going to move us on. Our next story is one that came through actually at the end of last year, which was after we'd recorded our last news show. So apologies, it's a couple of weeks old now, but we thought definitely still worth a mention. This one comes from Fintech Finance with a headline, Mercury applies for OCC National Bank Charter to become the bank for builders. So Mercury, the fintech business banking platform used by more than 200 ,000 companies and individuals, has applied to the OCC for a national bank charter and has also applied to the FDIC for federal deposit insurance.

42:19If approved, the charter would allow Mercury to operate as a regulated national bank rather than relying on partner banks to provide banking services behind the scenes. Mercury says a charter is the next step in its mission to deliver, quote, radically different banking, combining software built for speed with the stability and trust of a regulated institution. The company claims it is operating at significant scale with$650 million in annualized revenue, three years of GAAP profitability, and that one in three US startups uses Mercury. Miguel, maybe we'll come to you first on this one. I mean, in terms of some of the numbers there, they do point to some real scale.

43:08What do you think is sort of driving this decision from Mercury? It's interesting what they say about this sort of driving the next phase of their plan and sort of delivering that radically different banking. I think it's a couple things. Number one, if you were ever planning to get a banking charter, this is the time to do it. Regulatory speaking in the U.S., so they know that. We know that. So that's not one reason why they're doing it. There's another reason, if you think about it. As a bank, you are valued very differently than a tech company, right? you're essentially valued on book value, and you can be below book value, 1x to 2x.

43:57That's where most banks are. Or if you're a very tech forward, fast growing bank, you can be at 3x or more, but not a lot more. And so the way I see it, especially since Mercury has taken traditional venture funding, last one being led by Sequoia, is they are pretty certain and betting that they're going to be able to reach very large scale that will allow them to make it worthwhile for their venture investors, right? So they're saying our revenue today might be, I believe, right,$650 million or something like that. They're saying we can 10x that. We can be at a different scale. And honestly, the world outside of fintech last year, I think, woke up to the fact that there are going to be multiple fintech companies that will cross the$100 billion valuation mark.

45:01I'm pretty certain of that. We're already seeing it. And Mercury is saying, hey, we can get close to that, right? uh that i don't think that's an exaggeration and and obviously finally if you control your destiny with your banking license obviously you don't have to deal with the entire uh you know bass sector which has given mercury quite a few headaches yeah yeah so in a sense it's kind of like kicking off those shackles and sort of backing themselves to go really really big um And what was your sort of reaction, Benjamin, to this story? What grabbed you? This is a bit personal because I come from a market where Mercury had to shut us out for whatever reasons.

45:47I think it was tokenization. They just wanted to show that their compliance is better. And they're like, hey, see, we shut everybody from Africa out or something like that. But what I would say is like, Miguel is right. You know, everything always happens in cycles. because I remember when the first set of cross-border fintechs from Africa started, they built on that whole 2020 broker deposit rule and all of that, because it was a bit lighter then. So many of them launched solutions. And now anybody that is thinking of getting a banking charter in the US is probably thinking now is the best time.

46:20Many people that even abandoned it then have gone back to Troutman Pepper and other people to say, hey, put back my application. So if that was always their plan, then it's there. But what I think is, The question that I have in mind is still not answered. Does this make them less, more conservative or more bullish when it comes to acquiring customers from non-US markets? Because every time you have to issue accounts to non-US residents, your compliance guys are having a headache, right? You know, you're filing STRs every time because you're not quite sure what the flow of the fund is and what they are trying to do, ETC.

46:56So now that they're getting a banking license, Are they trying to say they sort of saturated the, or they want to take a step back and go deep versus acquiring more customers? Like it's not yet clear to me what that life after getting a banking charter would be like. But I always think that if there are banks like Evolve and other people who might need to serve fintechs that serve the international customers, maybe they will be able to figure it out and still serve some international customers. But usually the closer you get to the metal, the more those risks really impact on you. So I think that the overhead would actually lead them to reduce their international activity.

47:36But yes, if you are trying to just make money from doing less, quote-unquote, you know, you can make money from deposit interest. You can make money from lending. Those things were not directly available to them when they had to make a lot of money from fees and stuff as a fintech bank and stuff like that. so I am I if I was an investor and I heard Mercury is doing this I would be half and half I would be half and half because now with stablecoin there are going to be a lot more fintechs offering USD bank accounts to people international markets which is quite a lucrative space so getting a banking charter makes you more defensible however I don't know what that means for their long term growth in terms of acquiring more customers across the world.

48:24And I think the really interesting point that you made is sort of scaling to hit some of the numbers that we've talked about. There are clear trade-offs, so maybe you've got to lower some of the bars around, you know, restrictions and all of that sort of stuff. So that's not necessarily a straightforward journey. It's an interesting story. Sarah, what sort of stood out to you about it? Well, I think the points have already been made and made well that kind of now is the time to do it if you're going to go after a U.S. banking charter, I mean, they didn't have the same sort of approach that we had here in the U.K.

48:54and in certain parts of Europe, like after the last financial crisis of trying to make it easier for people to get banking licenses to encourage competition in the market. That didn't really happen. There were some stalled attempts, 2016, 2017, but political climate in the U.S. changed so rapidly that it kind of put the brakes on that. So I think it's interesting. I think it kind of, whether you go for a charter or not, depends on kind of what your business model is. So do you want to go deep into the vertical? Do you want to do, you know, all those ways of making money that Benjamin just described?

49:24Or do you want to have that attitude to use that phrase that's been kicking around for 20 years? Do you want to use a bank as a dumb pipe and you're going to build something really good and sleek on top of it? The banks are good at moving the money, just let them get on with it. You don't want to get involved in that regulatory kind of mesh. And I suppose there's two ways to look at it on that. We know that getting a banking license is hard, keeping it is even harder, right? You can get it And then you've got to maintain it. And that means a huge amount of oversight, huge amount of compliance, lots of talking to regulators.

49:52Regulators never move very quickly. You know, with the best will in the world, they can't move very quickly. So when you want to go and try and do something new, you're going to go speak to the regulator and say, we want to do this. They're going to take this six weeks. So it can kind of slow you down from that perspective. On the other hand, if you're the one with the direct relationship with the regulator, is that easier than trying to go through a partner bank? because I, you know, Miguel mentioned it, but the BAS space in the US just sort of spectacularly imploded there for a bit. And, you know, is that something that people want to pull away from?

50:25So I guess it depends on, A, what the business model is you're going after and B, kind of like what kind of relationship with the regulators you want to have. I think it's going to be, I think that space particularly as well, like you've got it here in the show notes, but you've got Mercury, you've got Brex, you've got Ramp. They're all trying to sort of fit themselves into this, you know, into this kind of serving small businesses ecosystem. And it almost seems like they sort of sat down and go, right, you take that bit, I'll take that bit. I think the other thing that's just finally worth pointing out is that I've mentioned it already today, but there are so many different ways to get a banking license in the US.

50:59It's not like in the UK, where you go to the FCA and the PRA and go, right, we want a banking license. Let's talk to you. You can go through the OCC. You can go through the FDIC insurance. You can go through kind of different state charters. There's a million different ways to do it. And I think that would be the bigger question for me if I was trying to do this, going saying, right, we're going to get a license because it suits our business model. Oh my God, which sort of license do we want? And then where does it let us operate? So the US regulatory space has always been, and I don't see this ending anytime soon, a complete mess.

51:30I think that's one of, that's kind of my key takeaway is almost that like it's one of those cool stories, but it raises more questions than answers. So it's one we're definitely going to have to keep an eye on. All right, on that note, we are just going to take a quick pause here and we will be back with you very shortly.

51:50Okay, now for a quick look at one story we didn't have time to cover in full. This one comes from Finextra with a headline, UK cash withdrawals rise for a fourth year in a row. Cash withdrawals from ATMs hit 4.2 billion pounds in 2025, surpassing the previous high of 4 billion pounds in 2017. This is from data from Nationwide. Data nationwide recorded around 34.7 million cash withdrawals from the 1 ,270 ATMs at its 605 branches last year, an increase of around 6 % on 2024. The average amount of cash withdrawn went up from£113 in 2024 to£120 in 2025. However, despite ATM usage rising, bank branches continue to close.

52:386 ,626 branches have shut their doors since January 2015, averaging around 53 closures per month. I mean, just very quickly on this one, you know, I think cash withdrawals and cash usage really is, I suppose, one of the great bellwethers in terms of how the population is feeling, how they're feeling about their personal finances, how squeezed they're feeling. This increase in cash withdrawals, definitely a continuation of a trend, certainly, that we've seen over the last number of years in the UK. I don't think it'll come to a surprise to anyone that people are still feeling enormously squeezed off the back of the cost of living crisis.

53:21Obviously, what stands out here is the fact that we're losing branches, we're losing ATMs. Of course, there's a disproportionate risk when that comes to vulnerable populations, vulnerable communities. companies, you know, as much as banks need to think about business models and cutting costs out of their operations. Obviously, we need to make sure that people are serviced and have access to the things that they need to be able to get the most from their finances. And finally, one more story you might have missed over the festive period that is slightly unusual. This one comes from Reuters and 7 News with a headline.

54:01thieves drill into German bank vault and make off with millions but they did pay for their parking a gang of thieves drilled into a German bank vault over Christmas and made off with tens of millions in valuables and then one of the robbers is caught on camera still of course in his balaclava calmly paying for parking not only that he comes back with more coins because he realizes he hasn't paid enough, which is an incredible moment of civic responsibility immediately after a major felony. Sarah, what are your thoughts on this? I don't think it's civic responsibility. You can't get out of the car park if you don't pay.

54:40Maybe that was it. It's all part of the getaway. They took, if you look at the news story in the video, they drilled into this bank, stole, you know, emptied the vault, whatever they did, carried it calmly into a car park, put it in the back of the car. But then you can see the picture of them. There's a big, bloody great barrier in front of them, which is why they're putting money in it. Because if they don't put the money in, the barrier is not going to open. Then they're going to smash through a barrier and that will alert people to what they've just done. Because when you read the story, they robbed the bank on the 24th, but nobody noticed till the 28th.

55:08So if they had smashed through the barrier on 24th, people would have noticed them. So whilst I understand the levity, I think it's actually just very pragmatic on their part. It was all part of a smooth getaway. It is. Jokes aside, it is quite sad because I was reading about this and we have talked talked about this in this podcast before, but a lot of people in Germany are still very cash-reliant, which ties into the previous story. And there's a couple of people who said their entire old-age savings were contained in cash in the vault of that bank. Now, I'm assuming the bank is insured, but it's, it kind of makes you think about, makes me think about, A, the use of cash, and B, the different ways different countries approach it.

55:46But yes, I think they're just very pragmatic bank robbers. I mean, you know, get out quietly. Yeah, well, that's it. I think, you know, we talk a lot on this show about all of these great, you know, sort of digital innovations and stablecoins and AI and all of that sort of stuff, but I guess, Benjamin, sometimes you just can't defend against a great big drill. A drill and some coins to put in the meat. And some coins to pay for parking. I was thinking, like, you know, if you were going to commit a robbery, why don't you just finish your act and smash through the barrier? Why are you even bothering?

56:19Yeah, do it in style, right? Yeah, do it in style, but like Sarah, explain, maybe that was a calculated move and good stuff. I imagine if, could there be, is there anyone that's ever tried to do this to just make the weight of what they've done look smaller? Right, maybe somebody actually robbed somebody and then maybe you gave$5 to a beggar on the streets. I don't know, you know, might be an interesting thing to find out. They messed up by not having a getaway driver that would be circling around without the need to park. Yeah, but I don't know then. if you've ever been to try and like, you know, pull up on the streets in Germany and you're trying to load the car, you know, they're very hot on it over there.

56:59I think, I think. I love that. This is all just, this is all just like, they've just been super pragmatic, right? Like they've gone in and parked where they could and they, yeah, sort of got out when they've needed to. I've thought about this far too much, haven't I? Sorry. No, it's good. It's good to have a super informed perspective. All right, look, let's leave it there. Thank you so much to today's guests. maybe we can do a little virtual sort of round the room where can people find out a little bit more about you and your company Sarah let's start with you you can find me on LinkedIn that's Sarah Kuchansky so drop me a line if you want to make me happy and give me some more work doing research analysis and writing research reports but yeah you can find me on there you can find all the stuff I do yeah more than happy to talk to anybody who's enjoyed the podcast today yeah I will definitely do it you won't regret it Benjamin how about you yeah I'm also on LinkedIn Benjamin Dada the name of my platform is thecondia.com but it's like not just me writing there so I think LinkedIn if you want to get me or Twitter I'm actually on Twitter at Dada Ben underscore amazing alright thank you Benjamin and how about you Miguel?

58:08yeah LinkedIn is great Miguel Armaza if you're starting to build a fintech company I'd love to talk to you also website is gilgameshvc.com or fintech leaders whatever you like to listen to podcasts. Amazing. Thank you, Miguel. And as for me, you can find me also on LinkedIn. That's Ross Gallagher. If you want to learn more about what we're doing in the consulting business at 11FS, it's 11FS.com forward slash ventures. That wraps up today's episode. Thank you so much for listening to today's show. If you like what you heard, please make sure to follow us on your favorite podcast platform of choice.

58:46And if you really like what you've heard, why not share the podcast with a colleague or friend? And as always, if you want to join the conversation, find us on social media. Just search for 11FS or FinTech Insider or email podcasts at 11FS.com. Thank you again and goodbye.

59:05Through 2025, we saw brands from every corner of financial services take their user experiences to the next level. From personalization and investments to AI chatbots and crypto, end users are more empowered than ever when it comes to managing their money. And we expect that trend to continue through 2026. If you're interested in keeping up with the latest product trends, feature releases and UX insights from brands like Monzo, Revolut, Starling, Nubank and more, then 11FS Pulse is the tool for you. Benchmark your product against the very best by analysing over 20 ,000 user experiences from more than 850 global brands, each handpicked and analysed in depth by product specialists.

59:49Find out more at 11fs.com slash pulse.