985. News: UAE surpasses UK in fintech funding, PayPal enables crypto payments, and Wise moves closer to US listing

20:49Laura Watkins:Yeah, it's such an interesting point in that, you know, they can offer it, but merchants have to take them off on the offer, right? If they want to be paid in cryptocurrency. So it's almost like open it up and see who has the appetite to pursue it. Would that be fair to say?

21:04Sophie Guibaud:Yeah, exactly. That's not compulsory. So let's see like what's the uptake when it comes to merchants and then when it comes to consumers. But that's definitely a step in the right direction is where the market is heading. But it's still early stage. is what we all, I mean, know or need to understand, basically.

21:22Laura Watkins:And Russ, to Sophie's point, this is, you know, moving away from the kind of Web3, you know, the more Wild West aspects and moving towards like a sort of more of an infrastructure play. This seems to be happening a lot at the moment, more so on the sort of stablecoin adoption than maybe traditional crypto. But, you know, do you think we're going to see even more of this, where people kind of are using crypto as an asset class and using the infrastructure behind it to kind of integrate into traditional financial services more and more. Yeah, I mean, in many ways, I think it's kind of classic hype cycle stuff, right?

21:54Ross Gallagher:You know, you have that sort of technological breakthrough, and you have your sort of early adopters, and their kind of narrative is, you know, fiat currency is dead, and this is the future, and everything's going to be decentralized. And I think, look, you know, we may well still get to a version of that future. But I think the reality is that, you know, that's always, we've seen this time and time again, it's a lot less big bang than, you know, some of those earlier adopters predict. And actually, it's a lot more gradual. I couldn't agree more with what Sophie said about it's a, it's another big step on the journey to crypto becoming mainstream.

22:30Ross Gallagher:You know, we saw another huge milestone when Stripe started facilitating crypto payments as well, right? You know, you're talking about, you mentioned, I think, 360 million or so crypto users. You're also talking about, you know, tens of millions of PayPal merchants, right? And so you're connecting all of those. And you are like the potential here for me for crypto adoption is huge. You know, Sophie quite rightly pointed out that you need the uptake from the merchants and not all of them will go for it. but if there is a significant uptake then does crypto become does crypto adoption then become more do we start to see that rise as well among the general population probably so in that sense i mean i sort of read this story initially and kind of went oh that's cool and then kind of thought about it and went oh this is potentially huge and so yeah like well done then i think it's

23:23Laura Watkins:a cool story absolutely mike what was your take on it um what does it kind of mean for paypal in terms of their intentions of taking on Stripe, Coinbase, that massive sort of network play of, as Ross said, sort of linking the enormous market of crypto users with the amount of merchants they already have? Yeah, no, I think it's a very, it's always an obvious thing for them to do because they're a leading payments company and you would expect them to be in crypto and stablecoin. I think there are a lot of views that say in 10 years' time, stablecoin will be one of the leading retail payments methods but we're not there at the moment so i saw some data recently that said that transaction volumes of stablecoin are higher than they are daily transaction ones are higher than they are for visa and mastercard but 80 percent of stablecoin transactions are all around crypto trading people are using to trade them that crypto asset so stablecoin is not being used for payments whereas lots of people with crypto are using their crypto for payments.

24:24Now, logically, over time, you would think that's going to transition from crypto being used for payments to stablecoin being used for payments. At the moment, people buying crypto don't necessarily want to buy stablecoin and use it for payments other than for their trading. So I think PayPal is giving themselves full optionality. They're looking at what the customers have, which is all sorts of different types of crypto assets. And certainly for the merchants, I think it's really good from a cost perspective, and that is why they should be attracted by it. Over time, I would expect to see a complete shift towards stablecoin payments coming through instead of crypto, and crypto being more for investments, trading speculation.

25:08But at the moment, crypto is where the payments are being made rather than the stablecoin. Interesting.

25:13Laura Watkins:Sophie, would you kind of agree with that approach of almost a flip-reverse coming in terms of consumer behaviours of how they use both crypto and stablecoin?

25:22Sophie Guibaud:I think it's an interesting point. I would expect this trend to be even stronger when it comes to corporates. I would say corporate payments because really I believe that a lot of the uptake that we have seen when it comes to stablecoin in the past, let's say, 18 months has been driven by cross-border transaction when it comes to corporates. But I would expect as well indeed that the retail will follow. Another point actually is that I have been thinking of when it comes to for the merchants to actually receive even payments when it comes to stable coins, etc. And even accepting it in crypto. Here we are talking, OK, like PayPal enables them to take it in fiat and stable coins.

26:08Sophie Guibaud:Eventually it might be in crypto. but there will be something from probably the PayPal side to be done to make sure that it doesn't become a massive headache for them in terms of tax implication, accounting, etc. So there is also this barrier to take care of. How you work it out at the other end.

26:29Laura Watkins:Yes, exactly. And how to get it out of a wallet and all the rest of it if you don't want to just re-transact in crypto, I imagine.

26:36Ross Gallagher:My understanding is that PayPal isn't actually mandating that they convert it into fiat or stablecoins. They will actually allow merchants to transfer the crypto into a linked wallet like OKEx or Coinbase or MetaMask. So I think they're already sort of heading in that direction, as you say.

26:55Laura Watkins:Interesting. In terms of like the actual average person that holds crypto, and maybe this is a question to you, Sophie, from your kind of experience in this market. Do you think people actually want to spend their crypto or are people still in that kind of hold, speculate, you know, use it as a sort of nest egg, as it were?

27:16Sophie Guibaud:I think we are like definitely still at the early stage of people that hold the crypto, that hold their Bitcoin, the hodlers, the ones that are trading and just trying to place what's basically a bit bad when it comes to like making transactions and day trading around it. I believe that like you know when even if you're a hodler when your crypto is high you have more propensity for sure to spend it or to buy stuff with it because you're just like oh I just paid like my bitcoin that much but right now is that much so like essentially it doesn't cost me much so I think there is still this thinking rather than jumping into oh I can make crypto payments But we need to think also about the people that get paid in crypto to optimize taxes, I would say.

28:10Sophie Guibaud:And probably some of them are very happy to be able to make crypto payments. So I would say it's still a step by step. I still remember when I was at Bitcoin Miami and I paid my tacos in crypto. It was a pretty cool experience, to be fair. But it's just because I'm a fintech and crypto geek.

28:31Laura Watkins:I hope that it wasn't something you regretted as, you know, the infamous guy that bought pizza with Bitcoin that, you know, could have been worth thousands.

28:40Sophie Guibaud:It was too late. It was too late. Like Bitcoin was too high already. Russ, what were you going to add?

28:46Ross Gallagher:Just, I suppose, looking at that question from a slightly different angle, you know, PayPal aren't rolling this out because they're crypto fundamentalists and, you know, they really want to spread the word of crypto. they're doing it because the merchant appetite is there, they're doing it because the customer appetite is there, they're doing it because the business case stacks up. Yes, there's absolutely advantages to being an early mover in this space. But yeah, I think we can safely say this is a trend.

29:17Laura Watkins:Yeah, I think you kind of alluded to as much as they kind of have to do this to kind of keep up. Would that be fair to say? Yeah, I think that's right. One crypto firm said to me recently that, Even though there's so much work going on around stable coins, it's still quite a slow burn in terms of, if you like, retail adoption. They said it'll become a mass market product when retail don't know they're using it. So most people are not going to want to know what a stable coin is. They just want to make a payment like they do with Apple Pay at the moment. They've got no idea what's going on under the bonnet.

29:51And that's when it'll hit mass adoption.

29:54Laura Watkins:That's when you know it works, if people don't know how it works, in a way. And on that note, we're just going to take a quick pause back very shortly.

30:27Laura Watkins:That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed-sponsored jobs.

30:35Ross Gallagher:Tomorrow morning is knocking. Stock your fridge now. How about a creamy mocha frappuccino drink? Or a sweet vanilla? Smooth caramel, maybe? Or a white chocolate mocha? Whichever you choose, delicious coffee awaits. Find Starbucks frappuccino drinks wherever you buy your groceries.

30:52Laura Watkins:Welcome back. Before we get back into the news, we wanted to share our latest insights episode with you. Small and medium-sized businesses, or SMBs, are the backbone of the global economy. But despite their vital role, they're still too often overlooked and underserved. In this podcast episode, we're putting SMBs back in the spotlight, and for good reason. You might be thinking, haven't we covered this before? And yes, we have. But in 2025, the challenges have evolved, and so must ask solutions. So how can we better meet the needs of SMEs, not just locally, but globally? The episode is out now, just head to the podcast below this one.

31:28Laura Watkins:And now back to the news. Our next story is NatWest adopts PEXA digital remortgage platform. This story on Fonextra. NatWest has signed a formal commitment with PEXA to integrate its digital property exchange platform for remortgage transactions with GoLive expected by mid-2026 and plans to extend into sale and purchase settlements. Pex's platform aims to accelerate remortgage processes, cut administrative burden, reduce fraud risk and enable faster, more transparent digital transactions via automatic data exchange between all parties. Built on Pex's Australian success and UK trials, remortgages that typically take weeks can now be completed and as little as 36 working hours and sometimes within 48 hours.

32:12Laura Watkins:Pex's plans to launch its broader sale and purchase solution in autumn 2025, covering over 70 % of property transaction types in England and Wales, with NatWest intending to adopt this functionality later in 2026. So Ross, I want to come to you first on this, sort of working with Tier 1 banks as you do. How is this a sort of significant step from NatWest to adopt a sort of digital platform such as this? And what does it show from their side in terms of their intent?

32:40Ross Gallagher:Yeah, look, I mean, it's funny, isn't it? I mean, when you read some of this, I suppose it kind of serves to underscore how broken this process is, right? So just to repeat some of that back to you, you know, cut administrative burden, reduce fraud risk, enable faster, more transparent digital transactions, automatic data exchange.

33:02Laura Watkins:By adopting this, NatWest admits they have all these problems. Right.

33:05Ross Gallagher:And so these are all things that, you know, absolutely we should have. I think the partnership with PEXA makes a ton of sense, right? Because the process, like it's such a good example of the difference between digitizing a sort of existing analog process versus what does this look like in a truly digital context, right? We kind of went, you know, mortgages work well in a sort of branch-based environment where I can sit down with someone and they can sort of handhold me through that process. They can verify my identity, they can do all of that and then we walk away and we're kind of in a good place trying to replicate that that process when you are one step removed on in a sort of online environment becomes really really really painful and guess what the pain sits with the customer right you know it's kind of a oh okay you can't come to a branch anymore because branches and people are really expensive just do it online and actually you're going to have to take all of the uh the load and the burden so i I mean, fixing this process, and we've had so many conversations with banks down through the years around this, has been such a high priority for so long.

34:15Ross Gallagher:But yet, certainly when it comes to the bigger banks, we haven't seen much by way of material progress. That's why I think actually this as a step forward is a big one.

34:27Laura Watkins:um you know anything that we can do yeah to improve that process which is fundamentally

34:32Ross Gallagher:broken for customers absolutely we should be doing it should be a big priority definitely

34:37Laura Watkins:and i was i mean i was joking that like nat west have kind of acknowledged that they have all these problems by making this partnership but like the first step into solving a problem is to acknowledge you have one right and so um in that regard it's kind of refreshing that they're taking steps and also you know if you can't do it yourself partner with someone who can um and so mike what was your take on this um natwest have 12 and a bit percent of the uk mortgage share so you know they're not as big necessarily as some of their competitors lloyd's barclays nationwide etc do you kind of think this might set a trend um in terms of other big bank providers starting to look at more digital solutions because as ross says digitizing of an analog process isn't really working at the moment.

35:23Yeah I mean it's very welcome to see some progress in trying to digitise the process. This is one of the biggest markets there is in the UK, the residential mortgage market in terms of loan volume, in terms of fees earned and obviously in terms of importance of decision for the customer. So it's a market that should be right for digitisation but hasn't really manage that and it's it's been quite a difficult market for fintechs to to try and get into um it's very difficult to compete on funding costs on mortgages if you're not a big bank and that has really got in the way of any anyone being able to get into this but anything that that can improve the processing has to be good in terms of getting the market to a better place i think that could lead to greater disruption greater opportunities for new entrants and um And it should lead, you know, you would hope one day that the whole house or property buying process is going to be automated.

36:23It'll be on blockchain. And, you know, that'll make it much more accessible for other participants in the market and perhaps bring more competition to the market.

36:33Laura Watkins:Yeah, I mean, that's hope so. I mean, to your point, yeah, fintechs have struggled in this area, but not necessarily in like, they haven't had huge success in the entire home buying process. but like in these little niches that PEXA is an example of, they seem to be doing well and then being like kind of acquired by banks, which is an interesting way of kind of still solving the problem. Yes, no, I agree with you. So people have been building businesses around the edges, bringing more efficient processing into the sector. And that is definitely good for the market. And it would be great to see more parts of the market being attacked like this in order to make the market more efficient.

37:13Laura Watkins:Definitely. And Sophie, interested in your sort of international view, obviously, we talk a lot about 11FS about how the home buying process is broken, usually with a bit more of a UK lens on that. Would you agree? Obviously, you're based in Saudi. I don't know if you have property buying experience in Saudi, but also in France and you're very well traveled. Would you say that the process is broken sort of universally or are there any learnings we can take from other markets?

37:40Sophie Guibaud:No, so I think the process is very much different from one market to another. So my experience stands in the UK, actually, and in France. In France, we have the beauty of not having to remortgage. So I am currently on the 105 % forever. Wow. So that's actually like one of the perks. We don't have like credit scoring. It's just different. It's a different market. So we don't have like the remortgaging thing. But like having gone through multiple times in the UK, the remortgaging, it's I mean, it's a no brainer. It's something that needs to be tackled. But it's not only the remortgaging. It's like the full mortgaging process and like all the intermediaries.

38:24Sophie Guibaud:It's like the whole value chain. And from what I understand from what BlackSci is doing is that actually they are in the middle of this value chain. And I find it's very interesting and compelling. and to the point of the partnership between NatWest and Plexa, I think, you know, it's what we have seen arriving like with the different banking as if a service platform, 10X and like Zoot Machine and like Membu and all of those. That was the first layer. Those, I believe, are probably doing also some mortgage applications as well. But it's vital for banks to actually collaborate with like tech providers that know what they are doing and focusing on solving one problem.

39:11Sophie Guibaud:Then the banks on the other side, they need to basically align all their processes, all their people, the customer experience. It's a really heavy lift and I find it very brave from the Northwest to take this leap with like 13 % of the market. And I believe it should be a first step for the whole market to actually take the leap.

39:37Laura Watkins:Yeah, definitely. And I think also Pexo is sort of FCA approved and also handles accounts for solicitors as well. So they're kind of handling the other side of the value chain as well. Ross, does that build on Sophie's point about them being like a real sort of network player and the kind of impact they could have for NetWest as a result as well?

39:55Ross Gallagher:Yeah, 100%. And the impact that they can have for customers, right? I mean, anyone that's been through the home buying journey, and I know we all sort of try and put it to the back of our mind once it's over and sort of remember it and shudder every so often. But I wouldn't underestimate the power of the sort of automatic data exchange between all parties element. I mean, anyone that's been through that process will have, you know, how many times have you been asked for the same piece of information a dozen times by all of the different parties? And sometimes even by the party that you've already given it to, you know, it's your fault.

40:34Ross Gallagher:You got to go and rectify it. So that network that, Sophie, I think you use the word ecosystem. I think that's absolutely spot on. You know, there's so much that can be done to grease the wheels between all of those different parties who, as it currently stands, are operating completely independently, completely in silo, and that pain is on the customer to go and bring all of those things together and put ticks in all of the millions of boxes that all of them have. So I think that's key. You know as well, and I don't know if this is part of it, I've just been thinking this whole thing around like wet signature like we have technology solutions for as long as we've probably been here that solve for this problem and yet you know some of these institutions still insist on wet signature print it off you know post it to us and as much as I think there's a lot that players like PEXA and NatWest can do to solve for some of these technological problems you know that's an operational and a risk problem and so i think you also have to bring that in line with what the technology can deliver before you can really actually achieve the realize the full potential of what we're talking about here definitely i think

41:45Laura Watkins:as yeah there's a lot that needs to exceed across the entire home buying process but you know what we are saying in short is that this is a good step um in the right direction so well done natwest well done pexa um but if you want to know more about our that is 11fs's thoughts on home buying and how to fix the process then good news because we wrote a whole report on it um you can check it out at 11fs.com forward slash home buying and we'll stick a link in the description of this very podcast and on to our next story which is that wise votes in favor of a u.s listing despite share class controversy uh this is in uk tech news shareholders have overwhelmingly voted in favor of moving Wise's primary stock listing to the US.

42:31Laura Watkins:The one vote package also approved a 10 year extension of Wise's dual class share structure originally set to expire in 2026. Despite vocal opposition, shareholders, including institutional backers, prioritize Wise's growth strategy and market access over governance critiques, according to the Wall Street Journal. This listing is expected to enhance its visibility in the US market, which is cited as the primary growth opportunity. WISE currently has a market valuation of around£11 billion and plans to maintain a secondary listing in London even after the US move. Mike, maybe let's come to you first on this.

43:06Laura Watkins:I think obviously WISE, a UK HQed company, I think the hope was that they would list in the UK, but the way the wind is blowing for most of these things, the US is sort of tending to tending to win out here what do you think the impact of this is and you know is there any like you've said on the kind of controversy as to why they think there might be a governance risk here well i mean i mean it's no getting away from it's a shame for for the uk for the uk market that wise are going to move to the us in terms of their listing they're a great business they listed quite early. They've been very successful.

43:44So it's a shame to see them go. I think they, I mean, they're a little bit unusual. Obviously they had this, they already had the dual share structure when they IPO'd four years ago. The UK didn't allow a dual share structure for a premium listing and the stock exchange had premium market and standard market and premium listing. You got into all the indices and the standard listing you didn't and they were not eligible for the premium listing because of their dual share structure. Despite that, they floated, they got a very big market cap. And then over the last few years, the FCA changed the rules on dual share structures.

44:21The Kalitha Review, which came out just before they listed, recommended it. The Hill Review recommended it. But it took about three years for all this to change. And it was almost like a negotiation between the FCA and the market. The first consultation that came out had a five-year sunset, it only allowed individuals to have it. I mean, and it iterated and eventually it changed. But, you know, I think that was all a bit too slow. And I'm sure if you are the founder of WISE wondering about this, you're not going to wait to see just in case the FCA change to suit you. You're going to look at other options.

44:56And, you know, the US doesn't really bat an eyelid on dual share structures. And there may have been that comment about governance in the Wall Street Journal. but the FCA's own data in their consultation said companies with a dual share structure where the founder has control have outperformed other companies. I mean, they've said that in their own data. The poster child for that is Mark Zuckerberg in Meta, where he has a very heavy proportion of votes, and he's had that for 13, 14, 15 years since they IPO'd. And the UK kept putting time limits on it, and everyone kept saying, look, let the market set that.

45:31If people can invest, if they don't like it, they don't have to invest. No one's forcing them to. So I think, you know, unfortunately that this all happened too late for WISE. And, you know, when you look at their numbers, in a year or two, the U.S. will be their biggest market probably in terms of revenues. So, you know, again, there are other commercial reasons. You know, a number of other U.K. companies, not other sectors, have moved from the U.K. to the U.S. in the last few years. And their market, the U.S. has become by far the biggest market. And that's kind of, in some ways, that's logical if your biggest market is the US.

46:04Laura Watkins:It's a growth strategy as well as a listing strategy. Russ, on the point about the kind of loss to the UK, as it were, are they almost kind of throwing London a bone of like, oh, we'll do a secondary listing after we've gone to the US? Is that just sort of, I don't know, a little bit of a consolation prize? What do you think?

46:27Ross Gallagher:Yeah, it's tough. Look, I mean, you know, the board of directors, their primary objective, their primary responsibility is always going to be to maximize value for shareholders, right? So in many ways, this isn't a major surprise. I couldn't agree more with what Mike said that, you know, this really is a shame and, you know, indicative of a wider trend, as we talked about in our top story. But, you know, even Nick Staronsky over at Revolut has been quite vocal about the fact that the UK isn't an attractive market, which is a list at the moment. You know, I think T.S. O 'Neill of Monzo has said, you know, that they would also have to seriously consider the US.

47:07Laura Watkins:I think that one was the biggest surprise, wasn't it? Because Revolute was like, fair enough, they are a fairly multi-marketed company anyway, so going to the US kind of makes sense. But Monzo, everyone thought that was like the jewel in the London crown. So I think it was a bit gutting when TS was like, oh yeah, we're going to be looking at the US as well, even though they don't have a huge foothold in that market at the moment.

47:25Ross Gallagher:And absolutely, I couldn't agree more. But again, you know, you can't, the UK can't rely on the nostalgia that comes with being the home market as enough of a draw. you know, as I said, you know, the responsibility of the decision makers in these businesses is to maximize returns for shareholders. And so, as we sort of mentioned on the previous story at the top of the podcast, you know, it's really important that the UK offers a competitive environment in which to list or else this trend is going to continue.

47:58Laura Watkins:Sophie, I'd like to get your kind of international perspective on this. Obviously, us sitting in London kind of mourning our losses is a very UK centric view. From your perspective, what do you think this says about or like what is the sort of global perspective of the London Stock Exchange versus the US? And you know, what can we do much like the first story as Ross was saying to kind of regain that foothold?

48:24Sophie Guibaud:Yeah, so I think I would like to piggyback on like all the comments that Mike has done. The thing is that, I mean, we are globally becoming more competitive. Clearly, like the US in that case is likely to become wise first market shortly. Like the investors see that. They see also the fact that they will be able to attract probably more capitals and that in London, there is the fact that it's more reputable and they can expect a higher valuation. So I think it's, I mean, it's kind of a no-brainer from a shareholder perspective. I think that there are other markets hitting up when it comes to IPO.

49:02Sophie Guibaud:I can definitely talk about Saudi that is putting an emphasis on that. There is also like UAE as well. And I have talked to many international companies actually surprisingly telling me, oh, we are thinking of doing an IPO in UAE. And I was like, oh, really? But when you see that Binance raised$2 billion, not through an IPO, but just as part of their story with like a private fund, then like if the capital is here, why not consider it, right? And don't get me wrong, as you all know, I am, or I don't know, not Mike, but I am British, proudly so. And so I am definitely in favor of, I want the UK market to succeed.

49:48Sophie Guibaud:But to do that clearly, like my recommendations, things are interesting. Another point I would like to make on this story, so it's about like the governance and the fact of pushing two decisions in just one vote. And I think like to the founder's points, it's something that is a bit forceful and it's two decisions that could have been kind of separate. And so it's very interesting to look at what has been done here. Well, if you're in favor of the U.S. listing, because clearly it's what is important for WISE according to their development, then you had to also vote in favor of the maintenance of the dual class actions.

50:40Sophie Guibaud:And something not worth it as well is they prolonged it for an extra 10 years. That's also a very strong move. So I guess it's just a point of thought on the governance of companies and the fact that they should evolve after the company evolves.

51:00Laura Watkins:Yeah, no, it's definitely a point worth making, particularly as their own sort of co-founder has opposed this vote structure. and he's worried about the sort of legal ramifications. Mike, as a sort of policy expert on the podcast, what was your take on that, the kind of one vote, two outcomes method they went for here? Well, I guess from the company and founder's perspective, they view them as interconditional, that they wanted the two to go side by side. I mean, the founder clearly wants to extend the votes And, you know, that's the bet that he's asking the shareholders to take. I mean, I think, again, you know, people, if they don't like it, they don't have to hold the shares.

51:44And that's kind of my view on these kind of market boats.

51:47Laura Watkins:Fair enough. And then equally, just sort of, I feel like we've almost come full circle on this story. So as with our first story today of like, you know, in terms of the competition element with the UK versus everywhere else, Like, as Ross said, you know, you can't just rely on nostalgia of the fact that you've been sort of a leader or second place for as long as you have. Like, that's not enough. And I think it was really interesting what you were saying, Sophie, of like, you know, the Middle East actually wants to be a competitor and just want to list in the UK, US. And that's your only options.

52:17Laura Watkins:They're starting to throw more options out there. So I think it'll be really interesting to see how that evolves and where, like, you know, fintechs that haven't even been born yet eventually list when they're ready to as well. I think it could be a very interesting evolution of the entire system. But I'm going to move us on. 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 is that Australians embrace digital banking as digital wallet use surges. So Australians made over 4 billion mobile wallet payments in the past year, totaling approximately$160 billion Australian dollars or$130 billion US dollars.

52:59Laura Watkins:surpassing ATM cash withdrawals by more than 11 to 1. Digital banking has boomed with 99.3 % of all customer bank interactions now occurring via digital channels. And mobile wallets now account for 39 % of debit and 33 % of credit card transactions. And nearly 46 % of debit and 40 % of credit cards are enrolled in wallets as of late 2024. and the overall digital wallet market size is expected to reach 336.1 billion Australian dollars by 2029. I seem to be reading out a lot of numbers on this podcast, probably quite badly, but the point is enormous growth. Russ, as someone who has visited Australia fairly recently and regularly, what's your kind of take on this?

53:44I think it sort of busts a common or at least a semi-common misconception

53:50Ross Gallagher:in the industry that there isn't much sort of happening in Australia when it comes to sort of like digital innovation, sort of digital disruption and competition. I mean, some of these numbers are absolutely staggering, right? You know, you've got mobile wallet payments, like 11 to 1 sort of outstripping cash withdrawals, 99.3 % of all customer bank interactions now occurring via digital channels. I mean, that's incredible. What I would say is that this is a really good illustration of what can be achieved with good, you know, digital propositions and good digital servicing offerings. I mean, yeah, like you said, like you're reading out a lot of numbers on this show, and I don't envy you.

54:37Ross Gallagher:But these are some really impressive numbers. And yeah, I think we should all take note.

54:43Laura Watkins:Definitely. Lots to learn from that. And obviously, I didn't say the only way is up for them, which it definitely is. But, you know, if you're at 99.3%, there's only a small amount of percentage to convert. But yeah, we will definitely keep an eye on that one. And as you say, sort of, I think we tend to overlook Australia sometimes as not doing a great deal. But this obviously shows the opposite, which is great. And finally, our last story to chat through today, Revolut offers financial independence to 16 to 17 year olds. Revolut now allows 16 to 17 year olds to level up their financial independence moving from a child account to a controlled personal account.

55:18Laura Watkins:The tiered structure aims to support financial literacy while retaining parental oversight and safety controls. It's a structured path towards full adult usage which matures at 18, transitioning to a standard Revolut personal account with full features. This is an interesting choice, particularly as it only spans as a one-year gap from a child account to you kind of go to a full personal account age 18. Sophie, as a parent, you were talking about your children earlier. What do you think of this one in terms of the sort of financial literacy piece, but also having those parental controls while they learn as well?

55:59Sophie Guibaud:I honestly think it's awesome. And the reason for that, it's because they get access to their financial independence while a lot of them are still at home and can do it still with at least the guidance of and the steering of their parents. I mean, I don't personally, when I started managing my finances was exactly when I also left home to study in Canada. So I did everything at the same time. So I was okay-ish when it comes to financial literacy, like always had money to spare, etc. But I find it amazing to be able to actually control your finances and learn along the way. And much earlier than when you're thrown in deep water.

56:48Sophie Guibaud:So I like that. The second thing that I'm experiencing as a parent. So I actually just gave her first Revolute card to my daughter, six years old. The kid's card, presumably. The kid's card, exactly. That's linked to my account. But it has been actually a few months that she's getting some colored pom-poms for things that she's doing and basically like pocket money. But it's literally for her. We started Pocket Money like 10 years before I started Pocket Money back in the days. So I believe that kids are learning how to manage money much earlier. I don't think it's only me. It's just what they see.

57:34Sophie Guibaud:It's what they want to buy. It's like that type of thing. But I actually love the fact that it can be a much smoother road. So I am all in for that.

57:45Laura Watkins:Amazing. uh mike obviously innovate finance is very passionate about sort of financial literacy and that sort of thing um what's your take on on this and sort of those parental controls on on this kind of level up of a kid's card yeah no i think i think it's great i mean i think go henry has had the market wrapped up for for many years and um it's great to see how they come into the market you know the revolut app and card are really good it'd be interesting to see what how they differentiate the service between the kids card this card and and the adult card but i think anything that helps that um passage through to four cards is is very good and you know my daughter's now at university she had a go henry card she found that you know really great in terms of using that for purchases what age do you age out of a go henry card to sound interest i don't know the answer to that well i think 18 it has to stop at 18 actually right okay so she then had to move out.

58:44But yeah, it certainly helps them. One of her friends in the form was taken out on a date by a boy who came to pay for the bill at the end of the restaurant, and they wouldn't accept it because Co-Henry doesn't allow you to pay for somewhere that's got alcohol.

58:58Laura Watkins:Oh, interesting. The boy had to ring his father to get him to pay the bill. So there are some definite life lessons to be learned from financial services. A little shine off his street cred, maybe. I love that though um Russ slightly different question for you I was reading this story is 16 to 17 maybe too old like as in should you put some of these these sort of ramping up phases in a bit sooner I only asked because I had my first like actual job age 16 you know was receiving a wage that kind of thing I mean you can join the army age 16 like you know should we be doing some of these things a little bit earlier.

59:42I think it's important to sort of think of this product

59:47Ross Gallagher:as transitional fundamentally, right? Because I think GoHenry, Rooster Money, you know, the Revolut child offering, I think are great propositions. I absolutely echo everything the other panelists said about them being an incredibly invaluable tool for learning good financial habits and behaviors that I think we didn't have previously. And to Sophie's point about getting in hot water, I think learned by doing things wrong and then feeling the pain. You know, that's, I would guess, the vast majority of people's financial journey. But actually, you know, previously, I think there was a bit of a cliff edge.

1:00:33Ross Gallagher:you know you had the the the child proposition you had all of the supervision and controls and that was a very safe environment and so what this what this is offering is you know you don't have all of the supervisions you can have a payslip paid into it for example you can transact in the way that you want to transact but then you know certain certain services some of the more complex services, so crypto investments, for example, aren't available. And so I think, you know, it really is about that first step towards true financial independence, applying those good habits and behaviors that you've learned through the kids' propositions in a more, probably a more independent environment, as they said, before then taking the full step up to a, you know, a sort of full service adult's current account.

1:01:24Ross Gallagher:So actually, I think this solves for a very real and a very interesting gap and I do I have to say I really really like it okay cool

1:01:32Laura Watkins:just as a little bit of fun to end on obviously you were you were talking about kind of like learning through doing Ross and occasionally that being getting it wrong uh to help you learn and and coming back to my question about uh sort of aging out when did you kind of feel financially independent what was like the milestone for you perhaps for us when it happens

1:01:55Ross Gallagher:Laura I will let you know um no I think look um you know it's I mean some of the things some of the things maybe that I mentioned I mean um I think financial education is one of those things that falls through the cracks right I think you know if your parents are really on it they'll probably give you a little bit but you don't get anything really at school you know whose role is it to really do that and so I think certainly I think you know we've sent generations of young adults out into the world totally unequipped to deal with these things properly you know i think um a couple of examples that i can pull from my own sort of financial journey at that age you know yeah to your point laura getting my first part-time job and just not having any sort of um habits around saving so i would get paid i would spend it all i would work rinse repeat right um or you know i think maybe when you first go to university and you get like a university credit card and they kind of go oh well we'll just you know we'll just give you a small limit of a few hundred pounds and then you sort of instantly max out the limit and then you got to pay it back and you still you know you start to we're learning a lot about you here Ross I know what I'm just saying I think Sophie's phrase of getting in hot water is um is exactly right and then eventually you sort of go oh I really don't like this I've got a I've got to sort of solve it and it takes a long time to dig yourself out of that kind of hole and then you

1:03:15Laura Watkins:kind of go right well I'm not going to do that again true maybe that's what this product is trying to save people from that. How about you, Sophie? You obviously mentioned going to Canada. Was that your financial independence or did it come before or after that?

1:03:27Sophie Guibaud:No, it was after that. It was when I graduated and I got my first paycheck and I stopped getting money from my parents. I've been lucky to get finance through my education. And so just the first month I started getting my first salary and it stopped. And it was really like the, yeah, like the first time I felt independent, I was 21. But just like to make a little joke, Ross, you're talking about like spending it all, your first wage, etc. So my six years old daughter is going through her entrepreneurial journeys. She has like started selling stuff. But at six years old, she's going through this phase of spending it all.

1:04:10Sophie Guibaud:Let me buy that and that. And I'm so happy she's going through right now. I haven't quite solved how to prevent her or like make her evolve, right? Step by step. But I'm just like, it's so nice. It's under me basically.

1:04:24Ross Gallagher:Exactly. This is the way to do it. Not when you're sort of, yeah, getting your first part-time job or whatever. I mean, there's a little bit more at stake.

1:04:32Laura Watkins:Definitely. Mike, any last thoughts on financial independence here? Well, I think I got my first current account when I first went to university and um i remember going to an atm with the current scam for the first time and i wanted to buy something for a couple of quid i wanted to take some money out of the atm i'm being shocked that it forced me to take five pounds out i couldn't take out less than that and uh i thought this is this is crazy i don't need five pounds and i just uh hadn't realized that the bank uh had these even had a minimum limit on how much you could take out never mind the maximum yeah i guess that's the whole point right you don't know what you don't know until you learn it um so i think that's that's um yeah that's really interesting and as we've just discovered everyone kind of you know reaches financial independence at different ages from university and beyond and later life and so on so i think you know some checks and balances that you can have on your way to that uh can be no bad thing so um well done revolute uh and let's see if anyone else that kind of follows their lead.

1:05:32Laura Watkins:But on that note, that wraps up today's FinTech Insider News. Thank you so much to today's guests. Where can people find out a little bit more about you and your companies? Ross, let's start with you.

1:05:43Ross Gallagher:Sure. Best place to connect with me is LinkedIn, linkedin.com forward slash Ross Gallagher. And as ever, please do check out 11FS.com if you want to find out a little bit more about who we are and what we do.

1:05:56Sophie Guibaud:Lovely stuff. Thank you. Sophie? So for me, it's connecting also on LinkedIn. So Sophie Guibo, and if you are like a B2B FinTech founder, wants to work on your growth with a sparing partner or a bank that wants to look into embedded finance or banking as a service, I would be happy to help. Brilliant. Thank you. Mike? Thanks, Laura. So do go to the Innovate Finance website if you want to find out more about our programs of publications and other events or you can find me on LinkedIn.

1:06:32Laura Watkins:Brilliant, thank you. As for me, you can find me, Laura Watkins, on LinkedIn, obviously 11FS.com or this very podcast. Thank you so much for listening to today's Finting Insider. If you like what you've heard, please make sure to follow us on your favourite podcast platform of choice and obviously feel free to share the podcast with colleagues and friends. If you want to join the conversation with us, find us on social media, search for 11FS or Finting Insider and we will come up or email myself and the team, podcast at 11FS.com. Thanks again, and goodbye. I want to date with Roars, Carty says.

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