Morning Brief 9.8.20: Digital boosts PayPal, Square's valuations

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New kids on the block?

The push to digital that's accompanied the coronavirus pandemic has been dramatic enough to push Square and PayPal's market capitalization into the same league as some of the oldest and most established banks.

Square last week temporarily passed Goldman Sachs, with a market cap of $70.7 billion, compared to Goldman's $70.5 billion, though by the end of the week Goldman had pulled back ahead. PayPal's market cap on Friday was $224 billion, compared with Bank of America's $225 billion. For a short period last week PayPal's valuation was ahead of all U.S. banks except for JPMorgan Chase, according to CNBC. Square's stock price has expanded more than 100% this year, while PayPal's has grown more than 70%.

Beyond the growth in digital, other factors include the larger real footprint traditional banks have to maintain, plus the cost of setting aside large amounts of capital to offset potential loan losses due to the pandemic, analysts told CNBC. Square recently received an industrial bank license, though it's not expected to begin making its own loans until 2021.

Checkout-free challenge

The group of technology firms building checkout-free concepts to rival Amazon Go continues to expand.

A French startup called Storelift has joined the fray, using a similar mix of AI and computer vision to identify items on store shelves and automatically charge the consumer's e-commerce account, reports VentureBeat.

Storelift has opened its first two locations, called Boxy, which are repurposed shipping containers that are mobile and designed for different locations. Size and location are two of the challenges facing checkout-free stores, which are still building toward full-sized supermarkets.

Hiring spree

Irish payment technology firm CleverCards is moving up a planned 2021 expansion, adding staff in marketing, development and engineering. It's adding 30 people, enough to triple its size.

The company is making the move to a quick jump in digital payments, reporting it is on pace to process 10 times more payments in the fourth quarter as it did in the first quarter. CleverCards supports payments from a digital Mastercard via email or WhatsApp to the recipient's choice of Apple, Samsung or Google Pay wallet.

CleverCards uses partnerships with Mastercard and EML Payments Plc to power international payments to vendors, contractors or customers while avoiding checks and traditional transfers.

Charges

Starling Bank has added several new card fees, following on the heels of fellow London challenger bank Monzo.

Starling will charge a £5 fee for replacing lost cards and a monthly £2 fee for new children's cards, reports Finextra. Consumers who make payments through Chaps, Starling's large-value clearing system, will be charged £20 per transaction.

Monzo last week added a 3% fee for ATM withdrawals totalling more than £250 per month and a £5 fee to replace lost cards. Both Starling and Monzo are making the moves in an attempt to reach profitability.

From the web

How bitcoin met the real world in Africa
REUTERS | Tuesday, Sept. 8 2020
ByteDance, the owner of popular short-video app TikTok, said it has acquired a Chinese third-party payment service UIPay in a bid to leverage its domestic payment capability.

Amazon fined by UK regulator over tardy documents release in Deliveroo probe
REUTERS | Monday, Sept. 7 2020
LONDON (Reuters) - Britain’s competition regulator on Monday fined Amazon (AMZN.O) 55,000 pounds ($72,364) after the U.S. online giant delayed an investigation into its purchase of a 16% stake in food platform Deliveroo by failing to provide documents on time.

Thunes raises $60 million for cross-border payments in emerging markets
TECHCRUNCH | Tuesday, Sept. 8 2020
Thunes, a Singapore-based startup developing a cross-border payments network to make financial services more accessible in emerging markets, announced today it has raised a $60 million Series B. The round was led by Africa-focused firm Helios Investment Partners, with participation from Checkout.com, and returning investors GGV Capital and Future Shape.

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