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Railsbank news round-up: Toditocash drops user fees

A brief look back at week 49 at some of the news that’s not always picked up.

Toditocash drops user fees

We start this week in Mexico, as one of the country's leading payment processing fintech companies said it will no longer charge any fees to users.

ToditoCash CEO Ricardo Dávila told the media at COPA PROSA, a payment-industry gathering in México City: "Beginning now, our payment services application ToditoCash will no longer charge any commissions to users."

All ToditoCash users can now transfer money, top-up their mobile phones, pay utilities, cable services, landlines, internet gaming and many other products and services at zero transaction cost.

Dávila explained that with more than 42 million people that have no access to financial services, new fintech companies such as ToditoCash are disrupting the lucrative payment business. He added that only 82 banks operate in Mexico, which has allowed steep service fees to generate over 55% of the banking industry's income. "It has always been the industry's cash cow. Poor customer service is rampant for businesses, but more so for individuals.”

The Mexican market is seen as a wide opportunity for fintechs. According to a statement early this year by SCT, Mexico's telecommunications authority, less than 18.1% of the 70 million active smartphones have a financial APP service. That's only 8.3 million of the nation's 126 million population.

Credorax Partners with Raisin

From Berlin and Tel Aviv came an announcement that fintech bank and smart payments provider Credorax, and savings marketplace Raisin, have entered into a new partnership which will offer retail deposits to Raisin customers in Germany.

The companies said that this partnership marks the launch of Credorax's first banking products in the region, and a broadening and diversifying of its portfolio and funding to Europe's largest savings market.

Raisin's German platform WeltSparen will be the portal to feature the payments specialist's new products designed for retail customers in search of savings opportunities with higher interest rates.

"Partnering with Raisin is a great opportunity for Credorax. As the payments and banking sector rapidly evolves in Germany and across Europe, this unique partnership allows us to expand our offering on the continent to include deposits," said Igal Rotem, CEO at Credorax. "Entering the savings market both extends our range of products and services and enables us to continue building our capacity to support more European merchants with our payments technology."

"Making Credorax's first deposit products available exclusively to our customers in Germany is a win for Raisin and for German savers looking for competitive yields on their deposits. By facilitating investing anywhere in Europe, we're providing customers with a solution to the persistent low-interest environment in Germany," explained Dr. Tamaz Georgadze, Raisin CEO and co-founder. "With this partnership we can create an opportunity for Credorax within the smart payments sector to diversify their funding base and take another step toward the new cooperative fintech economy - one built on specialization and partnerships like this."

Rsquare signs MoU with Singapore's Startup Accelerator

Back to our Asian base and we see that Bahrain-based software development company Rsquare Technologies and Singapore-based venture accelerator Startup Accelerator have signed a Memorandum of Understanding.

The agreement has been created to promote cooperation in fintech and other emerging technologies while fostering innovation and startup growth.

It aims to develop a collaborative startup ecosystem between Bahrain, Singapore and India, where Startup Accelerator also has a presence. As well as seeing Rsquare become Startup Accelerator's non-exclusive partner in Bahrain, and Startup Accelerator promoting Rsquare's products and services to its partners and clients in Singapore and India, the agreement includes building startup incubators in Singapore and Bahrain.

Both nations and their regulators – the Central Bank of Bahrain (CBB) and the Monetary Authority of Singapore (MAS) – are already close collaborators in the fields of innovative technologies and their regulation – particularly fintech.

Ms Shanthini Rahamathullah, founder, chairperson and CEO of Rsquare Technologies said: "This new partnership is an incredible opportunity for Bahraini and Singaporean startups. Both ecosystems have so much to offer, and through mutual cooperation and the sharing of best practices we'll be able to support innovative businesses to attract investment, grow and scale across our respective regions and beyond."

Dr Anand Govindaluri, founder and director of Startup Accelerator, said: "Singapore has one of the most supportive and established startup ecosystems in the world. We are always looking for new markets with a focus on internationalisation and digitalisation in new economies. With our focus on Emerging Technologies, IoT, Blockchain, Bahrain was an obvious choice for accessing the hugely exciting MENA region, and within that Rsquare is a natural partner for this journey. The signing of this MoU was just the first of many steps to come."

Virtual banks and fintechs to shake up Hong Kong banking industry next year

The launch of virtual banks in Hong Kong early next year is set to disrupt the traditional banking model and blur the lines between different sectors.

What’s more, banks are expected to adopt more technology solutions to manage costs and achieve operational efficiency amidst a rapidly evolving and increasingly competitive banking industry landscape.

These are the big findings of KPMG's Hong Kong Banking Outlook 2020.

Paul McSheaffrey, Partner, Head of Banking & Capital Markets, Hong Kong, KPMG China, said: "Reflecting first on 2019, we expect to see muted financial results across Hong Kong's banking industry this year, with ongoing market uncertainty around the US-China trade tensions and the low interest rate environment being the key drivers. The recent events and business disruption in Hong Kong have also impacted retail investor confidence. Despite a challenging year, we continue to see opportunities for investment and growth for banks in 2020."

Rebel raises $10m

Over to Brazil and news comes that Rebel, a digital consumer finance startup that offers middle-class Brazilians access to unsecured credit at affordable rates, has raised $10m in new equity funding.

Taking part in this latest round is Monashees, investor in successful Brazilian startups 99 and Loggi, and FinTech Collective, a NYC based global venture capital firm.

Since its inception, Rebel has received more than $1bn in loan requests.

“For decades our banking system has made no sense, resulting in a distorted relationship between consumers and credit,' explains Rafael Pereira, Rebel's CEO. 'We want to offer democratic and accessible credit products. When put to good use, they can be an extremely beneficial tool in people's lives. Traditional banks claim that credit in Brazil is expensive because of delinquency rates; but in reality delinquency is high because the country has the highest interest rates in the world. It is a perverse and vicious cycle, and a difficult one to overturn. That's why we are rebels: our goal is to break up with this loop and start a new and virtuous cycle.”

FinTech Collective has two prior investments in companies that share a vision with Rebel for the future of data-driven consumer finance. The first is MoneyLion, a digital bank operating in the US, and the second is Anyfin, a digital consumer finance company operating in Europe.

“We take an interest in companies that are willing to redesign their markets, led by entrepreneurs with a strong strategic vision and the discipline to execute,” said Sean Lippel, Principal at FinTech Collective. “We believe that Rebel has the opportunity to not only repair the broken USD $100 billion unsecured consumer credit market in Brazil, but also expand the availability of credit in the country by changing the way Brazilians relate to their personal finances.”

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