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CoverStory
The mobile restaurant ordering network LevelUp revealed
in June it had secured $50 million in new funding from
an investor pool that included "long-time partner and Leading fintech players: a short list
investor JPMorgan Chase," according to a press release.
Chase first invested in LevelUp in 2015, and in 2016, the Fintech is burgeoning. Thousands of technology startups are focused
bank said it had tapped LevelUp to enhance its Chase Pay on payments alone. Many are expected to merge, be acquired
mobile app with functionality like ordering ahead. by bigger players (or banks), or fall by the wayside as the market
evolves, experts noted. But a handful have made inroads and seem
Chase is one in a growing army of banking behemoths to have staying power. Here's a list of contenders with U.S. ties.
investing in fintech firms. Since 2012, the top 10 U.S. banks
(ranked by assets under management) have been involved • Amazon – Amazon is the most popular app for mobile devices
in 72 rounds of financing totaling $3.6 billion for 56 fintech – three out of four mobiles have Amazon loaded. Amazon Pay
firms, according to analytics company CB Insights, which leverages that to support payments at thousands of websites.
maintains a venture capital database. Wells Fargo & Co., Recently the company introduced Amazon Pay Places for order-
Capital One Financial Corp. and PNC Financial Services ahead food purchases, and a deal to support P2P payments
Group Inc. each have investments in the electronic billing among users of Skype.
and payment upstart Transactis. Goldman Sachs Group • Braintree – an e-payments gateway purchased by PayPal
Inc. has investments in six payments companies, including in 2013, it reported $50 billion in card processing volume last
Square and MoMo, a mobile wallet and banking platform year.
based in Vietnam.
• LevelUp – a mobile network that combines order-ahead,
While the totals seem large, Brandes Elitch, Director of rewards and payment functionality, it has a partnership with
Partner Acquisition at CrossCheck Inc., noted the money and investments from JPMorgan Chase.
raised by fintechs pales in comparison to the capitalization
of U.S. banks. "The large banks have about $15 trillion • PayPal – the longest-surviving fintech competitor, analysts
in assets, while last year the total financial technology have calculated that the total of customer account balances
venture capital investment was $12.4 billion, a mere exceed balances at all but the top 20 U.S. banks.
rounding error in the scope of things," he said.
• Shopify – is a cloud-based multichannel platform built
International appeal for small and mid-sized merchants who use the service
for everything from setting up online stores to accepting
The potential for growing electronic payment volumes in payments. It processes through scores of card payment
emerging markets – where large swaths of populations services providers, including PayPal. It claims over 500,000
are unbanked but have access to mobile devices – is huge. merchants in 175 countries.
Ditto for cross-border payments, particularly in support
of ecommerce. • Stripe – supports online and mobile payments; claims to
serve 100,000 merchants in 25 countries.
Stripe, for example, operates in 25 countries. In July, Stripe
heralded a deal with leading mobile payment providers • Square – entered the market with a card-reading dongle
in China that allows consumers there to use local mobile that supported credit and debit card acceptance by micro-
apps Alipay and WeChat Pay with ecommerce vendors merchants. It now also provides small-dollar loans through
accepting Stripe. Projections by the market intelligence Square Capital.
agency Mintel Group Ltd. suggest cross-border ecommerce
sales in China will exceed $190 billion by 2021. "Cross- • The Pays (Apple Pay, Samsung Pay and Google's Android
border ecommerce growth is huge," Peterson noted. Pay) – leaders of the mobile payment pack, the three support
"Where are the banks?" in-store and in-app purchases as well as other bells and
whistles like loyalty programs. Android Pay has the highest
Ed Starrs, founder, Chairman and CEO of My ECheck device penetration, at 55 percent of the market, Apple Pay
Inc., pointed to banks' aversion to risk, as well as their boasts the most participating card issuers at just over 1,800,
investments in entrenched legacy systems. My ECheck according First Annapolis.
developed a quick response code-based mobile payment
application that clears transactions in real time with • Transactis – an electronic billing and payment service for
retailers and other businesses, with financial backing from
guaranteed good funds, but failed to interest U.S. banks
in its offering. several large U.S. banks.
• Venmo – Began in 2009 as an online P2P platform, and today
Starrs turned to Africa next. The company now works with also supports mobile payments. It was purchased by Braintree
United Bank of Africa, in Nigeria, to support electronic in 2012, and now, like Braintree, is owned by PayPal. Venmo
payments via email, short message service and social reported processing $5.6 billion in payments in 2016.
media platforms. "We essentially put the U.S. system on
ice," Starrs said. However, he noted that My ECheck could
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