171: Money Talks #47 | Crypto Visa | Ireland's Latest Unicorn: Wayflyer | UBS-Wealthfront | Walmart Fintech Doubledown

Eoin Fitzgerald and Pete Townsend are back with the first Money Talks segment of 2022 with a big bump in consumers spending crypto on Visa cards, the UBS deal for Wealthfront, Walmart doubling down on their superapp strategy, the story of Ireland’s latest unicorn, Wayflyer, and the pummeling of PayPal’s stock price as a bellwether for the post-pandemic era.

This episode of MoneyNeverSleeps is sponsored by Philip Lee, one of Ireland’s fastest-growing corporate law firms and expert advisors at the heart of the Dublin and London start-up, fintech and crypto communities.

STORIES WE COVERED:

 Visa Customers Made $2.5B in Crypto-Linked Payments in Fiscal Q1 (Coindesk, 28-Jan-22)

 Eoin Fitzgerald considers the next move for Visa after enabling crypto spending:

  “My wife suggested the other day that our kids will bank differently than us.  They’re all age six to ten, and they’re all playing Roblox.

“People are spending pure crypto using their Visa card, but if you’re Visa, the smart move is to be the enabler to allow you to convert Robux or any other in-game currency you get from winning the game.

“All of a sudden, our kids are growing up with Visa cards issued by Roblox or Fortnite.”

How UBS plans to leverage Wealthfront’s robo-adviser (Investment News, 28-Jan-22)

Pete Townsend’s thoughts on the motivation for Wealthfront to sell to UBS: 

“Wealthfront are at about $28 billion worth of assets under management. It took Wealthfront a very long time to get to just $15 billion. They spent a lot of money getting there and it is a long road. So, I'm not surprised that they sold the business because sometimes, you’ve just got to get out.

“Who knows how much bigger they could have got. A robo-advisor is just only one part of the overall wealth story. It's an important part, but you've got things like tax planning, estate planning, insurance, all this other stuff that sometimes you just can't get from a robo-advisor, and you need a more complete picture of your wealth.

“You need to consider what’s coming down the road. It can be very personal and you're not just going to hand over the keys to a robo-advisor. I think that is part of the reason why it took so long for them to get to the level that they did.”

Walmart’s Fintech Arm Acquires Two Firms In Financial Services Super App Quest (Ron Shevlin, Forbes, 26-Jan-22)

Eoin Fitzgerald on the opportunities with a Walmart superapp:

“Walmart have built an incredibly good cross-industry supply chain, and could they slot in a couple of other things on top of that?  Could they easily get into delivery and logistics in terms of financial services to those players?  Of course, because that's their bread and butter – how they supply their stores all over the country - so it wouldn’t take much.”

Pete Townsend on Walmart expanding their eventual superapp even further:

“Whatever they end up building, can they make their superapp as an access point to their mini-apps available to other retailers, much like Amazon did in leveraging their infrastructure into AWS?”

Wayflyer becomes latest Irish tech unicorn after $150m fundraise (Charlie Taylor, Irish Times, 1-Feb-22)

Eoin Fitzgerald imagining the Wayflyer product roadmap.

 “They’re flying through countries now in terms of launching and being able to expand.  You have to wonder if they’re thinking about virtual debit cards, because obviously they’re providing the financing to the e-commerce companies, or even wider business solutions like with Brex.”

Pete Townsend adds in his thoughts on Wayflyer’s next steps.

“I’m thinking about other industries beyond e-commerce right. It works for e-commerce because if you think about the insight that they provide with their analytics engine, it's ‘who's buying what?’.

“How much of the stock is going in, going out, who are the suppliers and what does the order book look like? What are the payables and receivables?  They then combine that all together into a formula that says, this is how much we can loan them. But you're also getting really good insight in these companies, so could they go deeper into the value chain and provide financing one step beyond the e-commerce player?”

PayPal stock gets pummeled, wiping out nearly all of its pandemic-era gains (Fast Company, 2-Feb-22)

Eoin Fitzgerald on how PayPal’s woes might be a bellwether for other fintech players:

 “Part of the reason the market got spooked was that PayPal did more than 122 million over the last two years of net new accounts. But the big thing was that a number of these are low engagement customers or did one transaction and then didn't use it again.

“Then the account would fall dormant and then PayPal would pump a lot of money into getting in front of that customer again, to get them to do another transaction. And they do another transaction and then go dormant again.

“So, it was costing them far more money per customer for those accounts. And they're saying that this year alone, they'll have about 20 million incremental ‘one-and-done’ customers that will fall off.

“If they're saying that they'll lose 15 to 20 million customers who were only signing up to use the account once, what's that indicative of for Revolut and Square?”

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