Daily Update 01/12/22

Hi, this is The Current Account, your daily dose of digital banking news without the fluff. Get ready for 256,742 hours of research. From 37 sources. In 2m 45s...(or 8hrs if you have a long nap halfway through).

Let's dive in:

  • Wooden cards: Back to the future.
  • Digital loan sharks: They're more insidious than you think.
  • New-look corporate credit cards: Facilitating SME payments. 


Today's Big Ideas

Wood you like to see my new card?

Wood and human civilisation go way back. I mean, waaaaaay back. Even after we stopped living in trees, we’ve used wood to fuel fires, produce paper, and construct everything from clogs to baseball bats.

And now, wood’s beginning to permeate the digital banking sector.

TreeCard is a London-based FinTech powered by eco-friendly search engine Ecosia. It’s USP is its fully-fledged wooden Mastercard debit card which comes with a corresponding app, where customers can track spending and split bills with friends. The company reinvests 80% of its profits (which it makes from interchange fees) into environmental causes—planting an estimated 200,000 trees since it launched.

Excitingly, TreeCard has just raised $23 million in a funding round involving Peter Thiel's Valar Ventures, World Fund and EQT, Seedcamp, Episode 1 and various angels. It’s currently aiming to take on the US market, where it has a waitlist of 250,000 people. Impressive stuff indeed.

And who said money doesn’t grow on trees?

Ooft. Yes. Just don’t drop it in your beer.

Digital loan sharks are circling

The days of beefed-up debt collectors hammering down debtors’ doors have largely fallen by the wayside. Only, there’s a new loan shark in town—and this one’s particularly insidious.

Lookout, a cloud security company, has discovered roughly 300 loan apps on Apple's App Store and Google Play that exhibit ‘predatory’ behaviour. The apps promise fully-digital loan approvals with reasonable loan terms. However, in reality, they entice desperate customers to sign predatory loan contracts with hidden fees and high interest terms.

Worse still, the apps require customers to grant them access to sensitive information on their device (including their contacts, phone history, and SMS messages). This data has then been used to pressurise customers into repayments. For example, by threatening to disclose their debts to close friends or family.

The apps, which were found in Africa and Southeast Asia, as well as India, Colombia, and Mexico, have now been taken down. Phew.

Who’d blame ya.

The SME credit card chimera

Ever been turned down when trying to pay with a credit card? (And no, not because you were broke). Chances are, you probably have.

But why exactly is this?

Credit cards are great for consumers—but they can often be a right pain for suppliers. By accepting credit cards, they have to pay processing fees and wait a few days until the payment comes through. So, many suppliers simply refuse to accept them.

Suppliers, the second SME employees pull out a corporate credit card.

Fortunately, that’s about to change for SMEs. Cashplus Bank has recently announced that it’s going to produce a next-generation business credit card complete with a sort code and account number. This will enable direct bank-to-bank faster payments—meaning it’s more akin to a credit “account” that businesses can use flexibly to pay suppliers.

Cashplus Bank is even adding some BNPL features. For an extra fee, businesses can increase the repayment period on purchases from ‘up to 56 days’ to ‘up to 117 days’. Users can also restructure their credit card balance as an instalment loan, if required.

This is pretty handy—but it will likely make cash flow forecasting a nightmare for suppliers. C’est la vie. I guess there’s no way to make everyone happy.



Meanwhile... on Twitter

Heartwarming to see TreeCard going after a traditionally ignored demographic. Did you know that an estimated 93% of all penguins are unbanked?

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