This week in fintech

By Hauken from Stacc

👀 Why was Paypal eying Pinterest?

#79・
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This week in fintech

November 1 · Issue #79 · View online

A weekly summary of the latest news in our world of finance, design, and technology.


Also:
  • 🚀 Klarna expanding
  • 🥸 Metaverse
  • 🖋 Why Silicon Valley is excited about fintech
  • 🙏 PSD2 finally used for something interesting
  • 👨‍💻 The primary rule of interface design

👀 Why was Paypal eying Pinterest?
Last week PayPal was rumored to buy Pinterest. The deal was dropped, but it’s an interesting move nonetheless. Competitive pressure from businesses like Shopify has allegedly pushed PayPal to look for solutions to move higher in the e-commerce funnel. Buying a social media (or inspiration?) company might seem far fetched for a fintech, but it might make sense in multiple ways:
1. Owning an audience
dharmesh
Modern media companies have a software company embedded inside.

Next-gen software companies will have a media company embedded inside.
This comes from the CTO of Hubspot, a CRM tool that last year bought the newsletter the Hustle. Multiple banks/fintechs have done the same. Over the previous months, JP Morgan has purchased 2 content/media companies: The Infatuation, a publisher that offers reviews and recommendations on restaurants, and Frank, an online portal that helps students research and apply for financial aid. As early as 2017, Stripe acquired Indie Hackers, a website and community focusing on helping entrepreneurs become profitable while remaining independent. 
Pinterest is not strictly a content company like the above examples. However, PayPal could still leverage the buy to reach its users more directly and build an ongoing relationship with them.
2. Owning the whole funnel
The value proposition for Paypal + Pinterest is strong: What would you like as a merchant: A simple payment solution or a simple payment solution that also drives more customers into your site? Pinterest can certainly drive more customers: 77% of active pinners have discovered a new product on Pinterest and are 7x more likely to buy a product they have found. The holy grail for payment providers is to provide everything from consideration, payment, and loyalty in one app, and buying Pinterest could have made this a reality for PayPal.
🚀 Klarna expanding
One competitor to PayPal in this field is Klarna. Last week they announced a strategic partnership with Stripe. Retailers using Stripe can now activate Klarna as the preferred payment method in their checkout. This creates a huge potential growth for Klarnas’ payment business.
This comes on top of Klarna investing in, and launching a partnership with, the German fintech Billie, that delivers buy now - pay later solutions for companies. The plan for the companies is to send customers into each other’s services. If a company wants to shop an online store where Klarna is present, then Billie takes over, and the opposite happens when Billie has the strongest relationship with the online store and a consumer wants to shop.
🥸 Metaverse
Last week we wrote about the rumors that Facebook was changing its name. The rumors were true, and their new name is Meta. Facebook as a product will continue to exist, but this indicates a change in focus to the Metaverse. If you need an introduction to the topic, this is considered to be the ultimate guide. To be honest, I doubt much more will change in the short term than we’ll see more weird videos of Zuckerberg in the Metaverse.
Chris Bakke
I think about Second Life once a week.

In 2003 they were doing metaverse + online currency + marketplace of online goods + virtual real estate + avatars + anon accounts + massive multiplayer games.

Market timing is really, really important.
🖋 Why Silicon Valley is excited about fintech
Benedict Evans
Me to my US bank: How do I transfer to someone else’s account at your bank?
Answer: “We will mail them a check.”
Half the reason Silicon Valley is excited about fintech (let alone crypto) is the chance to do thing the rest of the world had before we were all born
🙏 PSD2 finally used for something interesting
We’ve all heard for years that PSD2 was going to be a game-changer for the banking space. Then nothing interesting happened. Until now: the electricity supplier Elekt uses PSD2-APIs to read their customers eFaktura, and based on that, calculate the mark-up on the invoice. Within 30 seconds, the customer is then notified whether Elekt can offer a better price than their existing electricity supplier. We needed someone outside the industry to make PSD2 more innovative than showing balances or moving money between accounts.
👨‍💻 The primary rule of interface design
Jeff Atwood
The primary rule of user interface design is that users won't read a single god damn word you put on the page.
That's it for this week 👋
Remember, if you’re enjoying this content, please do tell all your (fintech) friends to hit the subscribe button!
Marius Hauken, partner Stacc X
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