1094. News: UK fintech funding hits a decade low, NatWest backs accessible banking, and Pay.com.au takes on America

26:05You know, and my only real sadness is we don't see it a lot more, right? We should be seeing three or four of these, like, announcements a week where, you know, you've got these real kind of sticking points within the industry. And sometimes those, you know, sticking points are operational. Sometimes they're cross-border. You know, sometimes they're in and around disability. Sometimes they're in and around, you know, multiple different things. and there are some brilliant fintechs out there doing it. But the problem is it takes so long to match those fintechs with the problem and often it doesn't happen.

26:38So, I mean, the only thing I'd love to see more of here is just a lot more of these partnerships like this. And I'd love it if NatWest came out once a week and said, you know, hey, we've sold another one of these challenges where, you know, a minority of people can't get access to, you know, something they absolutely need to. So, yeah. Yeah. Yeah, I mean, Blake, keen to get your perspective as well. I mean, obviously, it's interesting here that NatWest hasn't built this accessibility technology itself. It's partnering with a specialist platform that already understands its customers. What's your view on that approach?

27:10Do you think actually this is the right approach to kind of go through third parties or partners? Or do you think it's going to be ultimately better in the long run if platforms can build their own accessibility requirements? Firstly, I mean, what a fantastic utility. It's a really nice announcement, and I wouldn't imagine there's too many fintech podcasts that are spending the time on this. So that's really, really nice to see. I think to answer the question directly, yeah, I think it's kind of the only way. I think someone like NatWest has too much going on. The priority list is too great, and their core customer use case is where they spend most of the time.

27:52And so if you want to provide the right solutions to other cohorts, then the only way to do that is to partner with a specialist. And specialists are spending every day thinking about these problems. They've gone through the rigorous testing. They're spending a lot of time with that specific customer type. And as a result, generally speaking, we'll get it right more times than not. whereas a big incumbent is going to carve out a small team and hope that that small team can get into the devil in the detail and make a product stick. And most times they can't because it's less likely to be the right team and it's less likely to get the focus and the funding that it needs to get something of this sophistication out the door.

28:39I don't have a lot more to add other than to say just a really nice announcement. Yeah, no, absolutely. you know Claire I can obviously see as Blake was saying you can see enormous positives to as he was saying like these services being designed by specialists who are spending their time with customers really clearly understanding the design problems I suppose if I was trying to put my concerned future hat on I suppose my only concern with this sort of partnership approach is is there a risk that we end up having lots of pockets of different utility that is being sort of pieced together almost in bursts of accessibility rather than people creating coherent, interconnected journeys and platforms which solve for multiple problems and pain points?

29:21Because certainly, from my limited understanding, it's quite as you were alluding to, yes, it solves some problems, but there are additional accessibility requirements that still need to be addressed. That was a really poor question. Apologies. That was more like a brain dump, but yeah, I'd love to get you perspective. No, I think the problem is with accessibility is that there are so many different types of need and different characteristics of, you know, if you look at it from a disability point of view, you know, a visually impaired person is going to have very different needs to a hearing impaired person compared to somebody with a learning disability.

29:55And the way our financial services and banking system works is very binary. You either have capacity or you don't have capacity. And if you don't have it, you will probably go through something quite legal and heavy, lasting power of attorney, deputorship. there's this and so people come up with informal workarounds which are high risk in themselves they share pins they share cards debit cards credit cards so on and so forth because they want to be able to they want their kids or their elderly parents to be able to access their money and the problem is I think with solutions we've had up until now is that they they take the independence and the power away from the vulnerable person if you like who we deem vulnerable.

30:36So does it risk being fractured? Yes, possibly. I mean, it's the thing that we're doing, the supported payments coalition at CFIT. That is actually, we're bringing together the banks, the big banks are part of that, the disruptors are part of that, you know, bringing in FCA, UK finance. So we're all sitting down and saying, right, how can we tackle this? At the moment, it's quite a narrow use case, because I think if you try to solve everything at once, it's too difficult. You can't solve everything under the accessibility bracket. So we're saying if we can solve it for this, people with a learning disability, actually it has much wider application because it means that elderly people who are not very confident in digital banking or people with dementia or fluctuating capacity, we can show by working together and coming up with a solution that is, you know, I don't even know what that solution is yet.

31:29We're right at the very beginning, but it could be a kind of an overlay, an app that just, you know, it sits alongside all the different bank accounts. So you don't have to go with one particular, it will just sit alongside and allow you to have that support as and when you need it in the way that you need it. You know, the way technology and especially with AI coming into that, and I don't, you know, I don't know how you get around the sort of security implications of AI and banking, but it should allow hyper personalisation. So it should allow the person to choose and pick and choose which type of help and assistance they need in order to be able to access their bank and their money.

32:09Yeah, no, absolutely. Well, sadly, we've got to wrap up this story. But as we were saying, it's obviously clearly lots more. This is a fantastic announcement. There's clearly lots more work that needs to be done. So absolutely, we'll be keeping our eyes peeled at Fintech Insider for more initiatives in this sort of zone. So kudos to NatWest and keep on going. On that note, we're just going to take a very quick pause here. We'll be back shortly.

32:56more than what you're looking for. From a browse to a bike ride, this summer, find more on Facebook. This episode is brought to you by Palmolive. Family time isn't just the big moments, it's weeknight dinners, sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palmolive Ultra. Palmolive's most powerful formula removes up to 99.9 % of grease, leaving your dishes sparkling clean. And the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at palmolive.com.

33:36Before we get back to the news, we wanted to tell you about our next After Dark event, which is now just over three weeks away. FinTech Insider host David Breer and me, Kate Moody, will be joined live on stage by special guests to record this very podcast and break down the biggest news stories of the week. It's taking place in London on Thursday, the 17th September and tickets are available now at londonfest.com slash after dark. There's also a link in the show notes below. If you want to be part of this fun, don't miss out. I believe there's free drinks as well, but that shouldn't really be the thing that decides it for you, but there are.

34:06Anyhow, back to the news and our final main story this week is pay.com.au brings Aussie rewards platform to the US. I took this from Finnextra, but covered in a few different places. Australian payments and rewards platform pay.com.au has raised 28 million US dollars in Series E funding to support its launch in the US under the Pay Rewards brand. The company says it is Australia's largest payments and rewards ecosystem, serving more than 30 ,000 businesses and processing over$7 billion US in business expenses during the past 12 months. Pay Rewards will allow US small businesses to earn rewards on business payments that traditionally do not generate points, including bank transfers alongside rewards already earned through their credit cards.

34:47Businesses can redeem pay rewards points through airline and hotel partners, gift cards, employee incentives, concierge redemptions, or use them as credit towards other invoices. The company says its platform allows businesses to pay suppliers by card or bank transfer while earning both their existing credit card rewards and additional pay rewards points. Blake, would probably be slightly weird if I didn't come to you first on this one. I mean, first and foremost, congrats on the raise and the kind of expansion. It sounds like a really exciting time. So, yeah, I mean, what's the plan here? It is exceptionally exciting.

35:20Thank you. I mean, it's nice to be able to talk about it. We are an Aussie business. We've expanded into the US. And the B2B payments ecosystem is one that has been fast growth but still neglects most. and we've got a slightly nifty approach to it, which is that we are a rewards-first payables engine. So as I alluded to in my brief introduction, we move money. We move money on behalf of business owners and it's your typical and traditional accounts payable use case for all business owners across all industries. The fundamental difference being that with every dollar you spend, you get a point and with those points you can redeem for all those things that you alluded to kate so look the aussie business um i bow down to and and say wow and if we can replicate that and trump that in the us where i'm based right now and i'm calling in from dallas um that will be fantastic and it's as simple as as this a small business owner needs to pay a bill they can use our platform to do that either bank transfer or credit card and then choose one point per dollar or two points per dollar and then once they amass a points balance to their liking they can move that to one of many different providers typically in the travel industry but more and more across other industries.

37:00And that's proven to be hugely attractive. And that's no different here in the US actually, where loyalty is a big industry, amassing points is a national pastime, and most Americans will carry multiple co-brand credit cards. The numbers are interesting, just to give you sort of some sense of what's actually going on in the world outside of pay rewards. So the global B2B payments market is 110 trillion in 2026, but it's suspected that or forecasted to grow to just short of 300 trillion by 2034. And so there's this massive migration from traditional AP and AR, so payables and receivables into more digitized and automated payments platforms.

37:44But one thing that's really incredible is that there's a lot of businesses still paying check here in the US. So 27 % of B2B payments volume in the US, 27 % is check and sub 7 % of B2B payments on credit card, sub 7 % on credit card. So you're talking about a massive change to payables workflows that is eventuating before our eyes. And from our perspective, that just means we can offer our platform and then offer great value on top of that by way of these rewards offerings. Yeah, I mean, it's always mad to me. I know I need to just be more in the data a bit, but it's mad to me when you hear these stats about check usage in different parts of the world.

38:33I mean, is that what attracted you to the US, that there is that kind of residual, I don't know what the polite phrase is for it, legacy payment methodologies still in the ascendancy? Well, yes. I mean, the other thing is we're unique in that we straddle both the fintech industry clearly, but also the travel industry. And so that is very attractive here in the US for obvious reasons. You've got a very, very hungry consumer appetite for the points ecosystem and industry. and enterprise business owners and executives tend to get well looked after in the point space too they carry corporate credit cards they get to use those they get to use those points for whatever it might be and small businesses will often be the ones neglected but they look and feel and in fact are consumers it's just that the payables use case hasn't necessarily had a rewards ecosystem surrounding it.

39:36So, I mean, the obvious things, Australia is a small market, the US is a big market. Australia is a huge loyalty customer base. The US has a huge loyalty customer base. It's a immature B2B payments landscape here in the US. And we believe we we can fit into that nicely and provide something of great value and benefit. And the payables utility and use case is extraordinarily similar. We don't have to, we clearly have to adapt. We have to have a different sponsor bank. We have to have a different approach to the way we move money and the regulatory and compliance landscape is slightly nuanced. But from a customer standpoint, the behaviours are the same.

40:20Interesting. Joe, keen to bring you in this one as well. I suppose from your investor perspective, Obviously exciting to see the raise. Congrats to the team. I suppose from your perspective, what is it that you think investors are looking for to have confidence that a fintech has a genuinely exportable business model rather than simply being very successful in one particular region or domestic market? Yeah, I mean, firstly, congratulations, Blake. I think it's exceptionally cool and kind of the holy grail of what you're trying to do, right? As a growth stage, you know, kind of fintech business is you expand outside of your geographic sort of core, right?

40:55And if you can do that into the US, which is the largest by far, you know, kind of market, especially in what you're doing, it just makes a huge amount of sense. You know, and by the way, this is probably the hardest thing that a fintech ever does, you know, is expand out of its core market. And then to expand out your core market and the first market you go into is the toughest market, I think, in the world in terms of to crack it because the competition is so high, you know, you really have to be prepared. And, you know, I unfortunately don't know enough about Blake's business, particularly not in and around the investment round they've just done, which I'd have been very keen to look at.

41:33But, you know, they've obviously, you know, you're looking at an experienced team, people that have done it before, and you've got to go into these things with your eyes open because, you know, there is a graveyard of particularly UK fintech businesses that have, you know, And businesses around the world that tried to go to the US and failed. And it's not like going into Asia or China where the language is a problem, sometimes the regulation, sometimes there's government forces at play. This is a market that's just highly competitive. And so full kudos to Blake and the team. Massive, massive step in their journey.

42:09Yeah, absolutely. Claire, what was your take on this? I was just thinking about, it's got all sorts of things sparking in my mind. It's a really great idea. For our third coalition, we looked at how we could help SMEs access finance more easily and just get more finance, basically. A lot of the time in the UK, they fail not because they've got a bad credit score or they're just not eligible for it. It's just because they're not pulling together the right data at the right time. They just don't know enough about the process. So we were looking at, you know, could you provide them with some sort of, you know, working with the credit reference agencies, with Companies House, with the banks?

42:54Could you pull together some sort of financial coach, if you like? It was AI based. We did a proof of concept on it to help the small businesses better understand the whole process, how their business fits into it, where they are in cycles. and that would ultimately allow them access to more credit and therefore we would, you know, SMEs are the backbone of the UK economy that would feed directly into economic growth. But it was also quite important, there was another sort of side to it from an economic crime and fraud perspective as well. But, you know, the big problem is how, you know, SMEs, they're really busy.

43:32They're, you know, they don't, often this is the last thing they want to do. They don't really like the accounting side of it. they don't like applying for credit. So we were thinking, how do we get them? How do we tempt them in? What's the incentive for them to use it? And I'm just thinking this type of system could be a really good way of getting them to do that, to link it. It goes back to quite a good point, right? Like historically, what we've seen is international fintech businesses coming to the UK and before they expand into the US, now that's slightly different with an Australian business because of the time zones and because of the language and that sort of stuff.

44:05But Blake, was there any consideration about coming to the UK first? Or was the US just a market that was just too good to ignore? I mean, certainly consideration, and there's still consideration actually, Joe. We are doing exceptionally well in our home market, and it therefore does give us some optionality. I think that the US market is just too attractive from a loyalty standpoint. So the UK market is obviously a good market, but travel is actually very accessible for most people in the UK for obvious reasons. The geography, but also the competition among low-cost carriers. Whereas in the US, business travel is actually expensive.

44:49Travel generally is driven by credit card spend and attachment to a loyalty program. And so there's the core fintech utility, which is payables, and that's front and center, is a frustrating workflow and process for most business owners today. To Claire's point, they're busy. They've got lots to do each day. And so if you can make a core use case and utility a bit easier for them to bite into by way of the value proposition, in our case, that's loyalty and rewards. it makes sense and it just felt to us, Joe, that the American consumer or business owner would understand that a bit quicker and have a faster appetite.

45:30And then there's just market size. Now, you sometimes have factors pulling you towards one market or another. And we happen to be very close to American Express in Australia. They obviously see a huge volume out of our platform. So you start to be able to leverage those relationships, get advice, get an understanding, get endorsement and advocacy among a strategic partner and they might drag you somewhere. I'm certainly not suggesting they forced our hand or that they've got any greater influence on the business, but it's nice to know that you can tap into that level of subject matter expertise.

46:06Yeah, I mean, we're just, I guess our ego is big enough to go after the biggest market. I think you've got a good solid ego to survive in this space. Well, yeah, I mean, yeah, as everyone said, like massive congratulations to the team keep our fingers crossed that you know you take over the u.s more successful than the beatles did um and uh next stop the uk and we've heard it here first i'm obviously taking that as as absolutely like a firm pledge now and i get the sense that joe will be quite pissed off if you don't tell him before you announce it so i'm just giving you that as a as a minus there now okay uh on that note we're just going to take a very quick pause here we'll back again shortly.

46:44This episode is brought to you by Facebook. So you were scrolling on marketplace and there it was the bike you'd been searching for. You sent a message and it turned out the seller was super chatty, kind of funny and an avid cyclist. The next thing you know, you're in a cycling crew. Well, a community cycling group. The thing about Facebook, you might find more than what you're looking for. From a browse to a bike ride, this summer, find more on Facebook.

47:18Okay, now for a quick look at stories we don't have time to cover in full. This one's taken from the papers, and that is Nationwide launches free credit score service. Nationwide has introduced a new credit score tool that allows customers to check their score directly through its mobile app and online banking about affecting their credit rating. Alongside displaying the score. The tool explains the factors that influence it, with Nationwide aiming to help customers better understand how their credit profile can affect decisions such as borrowing and applying for credit. The launch follows FCA research showing that 66 % of people who check their credit report or score do so to get an overall picture of their financial situation, while 41 % check out of curiosity and 20 % use it to understand their eligibility for credit.

47:55Nationwide plans to expand the feature with further educational content around borrowing, saving and money management, using customer research and feedback to develop the service. The building society says it will pay particular attention to the needs of vulnerable customers as the tool develops. I mean, I think, yeah, absolutely always interesting to see the different tools and services that banks are integrating directly into their platforms. We've seen this across quite a few of the banks now in the UK, kind of building credit scores into the app. So it'll be interesting to see kind of actually as this journey comes out, like what is it that Nationwide are building around the credit score?

48:31as they've alluded to to really try and help people get as much from it as possible. Again, definitely good to see they're being sensitive to the potential risks of people responding to this score without the context and kind of trying to avoid any sort of negative interpretations as well. But yeah, we'll keep an eye out for this one and hopefully we'll have it on Lungfest Pulse before too long if you can access it there. And finally, if traditional funding isn't working, apparently there's always OnlyFans and crypto. Let's talk about marmots. So, this story was taken from The Guardian. Scientists who turned to OnlyFans to fund marmot research receive crypto boost.

49:08A 60-year-old scientific research project studying yellow-bellied marmots in Colorado has raised more than$100 ,000, not bad, after turning to two unconventional sources of funding, OnlyFans and cryptocurrency. The long-running research program was facing closure, following cuts to US federal science funding, prompting researchers to launch an OnlyFans account called OnlyMoms, featuring videos and pictures of the animals. I hope they were appropriate. The account has raised around$6 ,000, but an even larger source of funding emerged when outside supporters created a marmot-themed meme coin called, I don't know if I should read out the dollar sign, dollar sign OnlyMoms, you can see how up-to-date I am with crypto there, on the Solana blockchain.

49:53The coin's creators are donating transaction fees to the research program, generating more than$88 ,000 in two weeks. Together with other donations, the campaign has now raised more than$100 ,000, enough to keep the research running for another year. We'd like to really cover the serious stuff on FinTech Insider. I mean, I did actually, to my shame, have to Google marmots before the show just to double chat, it'd be really clear in my head which animal they were. And Google described it as a ground squirrel. They're quite sort of chunky and fluffy squirrels. They seem quite cute. So, Joe, as an investor, funding expert, what do you think of this strategy?

50:36Is this going to be the way forward for fintechs? I don't know. But I do think that financial services and fintech, I always used to call it the meerkat moment in in kind of wealth management um and you know when people started buying insurance in the uk um because of those meerkats and it was almost became a default thing and people were then buying car insurance and house insurance because they got different meerkat dolls um and i think this is sort of similar it's bringing um kind of stuff that would historically be sort of not everyday and not particularly sort of, you know, fun or engaging into the natural world.

51:19And then this is kind of thing we need to do, whether it's like saving for your pension or, you know, saving for your children's future or whatever it is, if we can somehow make it interesting, I'm not necessarily suggesting we do anything more with OnlyFans. But, you know, then I think this is a really positive thing for the financial services industry because we're often a bit boring. Claire, is this something that C-Fit will be considering as a potential update to the UK's fintech funding structures? Who knows? We'll have to put it through our AI hopper and see whether it meets our criteria or not.

51:56It'd be a good one to put through and see what it thinks about it. Yeah. I mean, I obviously don't know enough about blockchain because it just seems ludicrous to me that they can raise that much money just off one meme coin. I mean, Blake, were you surprised? If you had to kind of go down an OnlyFans route or a blockchain route to fund a random project at pay.com, don't you? Would you have gone the Bitcoin blockchain route? Yeah, look, I'm here to announce$20 million in USD funding through an OnlyFans account. It seems, well, look, it's a big user base, isn't it? So there's something going for it.

52:39I'm not sure what else to add here. I did like, I do remember, I do remember, I think that was compare the market, Joe, with the meerkats talking to you. We had that in Australia too. And the funny story about that very quickly is the number one kind of compare the market competitor in Australia was iSelect, which is also the founder of iSelect is the founder of Pay Rewards. So anyway, bring that back to myself. But, yes, I remember the meerkats and I remember every Australian comparing prices on electricity insurance and absolutely everything else. So, nifty ways to get customers to respond to something, I guess.

53:18Yeah, I mean, we were talking about the difficulty of deciding which market to expand into next. But I'm thinking now, now that we've talked about meerkats, surely that must have been a decision on the table because it could have been compare the moment. You know, this could have been a real sliding doors moment. You know, if it had been compare the Marmot, maybe we wouldn't have ended up in this situation where they needed OnlyFans funding. I mean, I think meerkats are doing okay. They didn't need the boost, whereas it sounds like marmots are under much more pressure. I mean, if they bought a meerkoin, I'd be all over it.

53:51I would literally be, a dollar sign, it's a pound sign meerkoin, I'd be all over it. Yeah. I mean, again, I suppose, maybe Blake, come back to you guys as the payments people, you know, could mechanisms like transaction fees, create genuinely useful ways of funding charities, research, other public interest projects? Well, absolutely. I think there'd be a lot of that already happening, I would have thought, using crypto coins, wallets, as a form of donation or a donation mechanism. I would have thought there's a fairly established industry around that, but maybe I'm mistaken. I have to go. I have to go over rummage.

54:31Okay, so to close it out, If you've got to set up, if you've had a, you know, I think the researchers didn't create the coin themselves. An online community did it for them. And obviously we have an online community with FinTech Insider. So if Strange has created a meme coin in your name tomorrow and promised to give you all the transaction fees, how are you responding, Claire? Are you in favor of this? What's your meme coin going to be called? What's it going to fund? My meme coin is going to be called Dollar Sign Alpaca. and it's going to fund my need for luxury yarn because I'm a big knitter and I spend far too much money on cashmere.

55:08But if you get a certain type of alpaca, their wool is like cashmere. So there we are, I can set up my own wool farm. I think the marmots need to stop being so selfish and start to share some of this reward. Blake, what's your meme coin? What's it funding?

55:28it's funding my ever-ending never-ending commute from Melbourne to Dallas every four weeks oh my gosh that's a pricey geez yeah by the way I did just find a platform it's called free will and you can liquidate your digital currency from one of 300 different cryptocurrencies into US dollars to immediately distribute to a charity okay well there we go go check them out I'm not endorsing it personally, but it sounds interesting. And Joe, what's your meme coin going to fund? Something netball related? I think I'm a long netball. So I think it would have to fund something in and around kind of the education of children around savings and spending.

56:16So it would have to be something like squirrel, save your acorns sort of coin. That's nice. That's not at all selfish. We wanted very selfish responses to this question. I had enough time to think about it. That's the best answer, though. Oh, damn it. I think mine's just going to have to fund my pizza consumption. Like, it's just excessive. But I can't think of, like, a fun name for it, sadly. So if anyone's got any suggestions, they can send them our way. Okay, well, on that note, that's it for today's show. Thank you so much to today's guests. Where can people find out a bit more about you and what you're working on?

56:52Claire? either through my LinkedIn profile or CFIT is cfit.org.uk fantastic Joe LinkedIn or some of the amazing fintech businesses I'm currently working with at the moment awesome and Blake payrewards.com please or LinkedIn Blake Hutchison please find me say hello or by the sounds of it at Melbourne Airport or Dallas Airport just if you're if you're there all the time anyway so that's right and as for me you can drop me an email at kate.lmf.com or you can find me on LinkedIn as well. 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.

57:31And if you really like what you've heard, why not share the podcast with a colleague or a friend or someone who just really loves marmots? As always, if you want to join the conversation, find us on social media. Just search for 11FS or for Tech Insider or email podcast at 11FS.com. Thanks again and goodbye.

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