Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.
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Harness Lab isn’t founder Jyoti Bansal’s first startup. He sold AppDynamics to Cisco for $3.7 billion in 2017, the week it was supposed to go public. His latest venture has raised $425 million, per Crunchbase. On Tuesday, Harness announced $150 million in debt financing, essentially a line of credit that the company can draw on […]
© 2024 TechCrunch. All rights reserved. For personal use only.
ICICI Bank, one of India’s top private banks, exposed the sensitive data of thousands of new credit cards to customers who were not their intended recipients.
The Mumbai-based bank confirmed to TechCrunch Thursday that its digital channels “erroneously mapped” about 17,000 credit cards issued in the past few days to “wrong” users. The issue came to light after some customers raised concerns on social media about the bank’s iMobile Pay app exposing unknown customers’ credit card details, including their full number and card verification value (CVV).
“Our customers are our utmost priority, and we are wholeheartedly dedicated to safe guarding their interests,” said Kausik Datta, corporate communications head at ICICI Bank, said in a statement emailed to TechCrunch. “We regret the inconvenience caused. No instance of misuse of a card from this set has been reported to us. However, we assure that the Bank will appropriately compensate a customer in case of any financial loss.”
The spokesperson added that the number of impacted credit cards constituted about 0.1% of the bank’s credit card portfolio.
As reported by the finance-related forum Technofino, sensitive data such as the full card number, expiry date and CVV of unknown customers’ credit cards suddenly appeared for some users on the iMobile Pay app.
“I have access to someone else’s Amazon Pay CC due to a security glitch on the iMobile app. Although OTP restricts domestic transactions, but I can do international transactions using the details from the iMobile app,” one of the users wrote on the forum.
The bank spokesperson told TechCrunch it blocked the affected cards and is issuing new cards to customers.
ICICI Bank, which has over 6,000 branches in India, is in 17 countries worldwide. The iMobile Pay app, launched in 2008, has over 28 million users.
Lerato Motloung is a mother of two who works in a supermarket in Johannesburg, South Africa. After her phone was stolen, Motloung had to go without a mobile phone for nine months because she could not afford a new one. Then, in February 2024, she saw a sign about PayJoy, a startup that offers lending to the underserved in emerging markets. She was soon able to buy her first smartphone.
Motloung is one of millions of customers that San Francisco–based PayJoy has helped since its 2015 inception. (She was its 10 millionth customer.) The company’s mission is to “provide a fair and responsible entry point for individuals in emerging markets to enter the modern financial system, build credit, achieve economic freedom, and access digital connectivity.”
Image Credits: PayJoy
PayJoy became a public benefit corporation last year and is an example of a company attempting to do good while also generating meaningful revenue and running a profitable business. And, unlike other startups offering loans to the underserved, it’s doing so in a way that’s not predatory, it says.
“We meet customers where they are — even with no bank account or formal credit history, we create access to financial services and carve a path into the financial system,” said co-founder and CEO Doug Ricket.
PayJoy is applying a buy now, pay-as-you-go model to the estimated 3 billion adults globally who don’t have credit by allowing them to purchase smartphones and pay weekly for a 3- to 12-month period. The phones themselves are used as collateral for the loan.
While the loans are interest free, with no late or hidden fees, the company does mark up the price it charges for the phones by a “multiple,” Ricket said. But it shares the full price upfront before customers sign a contract.
“Users will never pay more than the disclosed amount and can return their phone and walk away debt-free at any time,” he says.
If a customer does miss a payment, their device is locked and is unusable outside of contacting PayJoy or emergency services. To unlock the device, the user needs to make a single weekly payment and the device will then be unlocked for 7 days.
Adds Ricket: “Even upon serious delinquency, PayJoy does not repossess the device and does not communicate individual loan performance to retail partners. PayJoy does report loan performance to credit bureaus including both positive and negative history, so their credit report will be affected accordingly.”
By the fourth quarter of 2023, PayJoy had achieved an annualized run rate of more than $300 million, Ricket told TechCrunch exclusively. That’s up from $10 million in 2020, when it first introduced lending. And the company was “net income profitable” in 2023. It also managed to raise significant capital during a challenging fundraising environment. Last September, PayJoy announced that it had secured $150 million in Series C equity funding and $210 million in debt financing. Warburg Pincus led its equity raise, which included participation from Invus, Citi Ventures and prior lead investors Union Square Ventures and Greylock.
PayJoy has come a long way since TechCrunch first profiled it in December 2015 when it had secured $4.3 million in equity and debt about 10 months after its inception.
Image Credits: PayJoy
Today, the company operates in seven countries across regions such as Latin America, India, Africa and most recently, the Philippines — providing over $2 billion of credit to date. In October of 2023, the company launched PayJoy Card in Mexico, providing customers who have successfully repaid their smartphone loans with a revolving line of credit. Ricket says that PayJoy can “enable cheaper credit and … reduce default rates” by using data science and machine learning to underwrite its loans to assess a customer’s creditworthiness. He says 47% of its customers are women, 40% are new to credit and 37% are first-time smartphone users.
Ricket was inspired to start PayJoy after serving in the Peace Corps following his graduation from MIT. He then spent two years as a volunteer teacher in West Africa, where he became interested in technology in the context of international development. After the Peace Corps, he landed at Google, where he helped create the world’s first complete digital map.
Ricket then moved back to West Africa where he worked for D.Light Design in the pay-as-you-go solar industry. All of that experience has been combined in PayJoy.
The company is on track to achieve over 35% revenue growth this year, with strong momentum in Brazil and new product offerings in development, according to Ricket. Presently, the company has 1,400 employees. It has raised more than $400 million in debt and equity over its lifetime.
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Klarna is launching its credit card in the United States, the Swedish fintech giant told TechCrunch in an exclusive interview.
“It was one of our most asked for products,” said David Fock, Klarna’s chief product officer, “and will allow people to pay in the Klarna way but with a card.”
By “Klarna way,” Fock means in installments. While the company’s offerings have evolved over the years, it started out as a buy now, pay later business, giving consumers a way to spread out payments over time.
Klarna launched a credit card in the EU several years ago but this will be the first time consumers in the U.S. can apply for one.
With the Klarna credit card, the company is now competing with the likes of Apple and more recently, Robinhood as well as rival BNPL player Affirm in offering a credit card in the United States. It is partnering with Salt Lake City-based WebBank in the effort. There is no annual fee for the card, and no foreign transaction fees.
Users can earn up to 10% cash back on selected merchants when using the card in its app and the card integrates with the company’s AI assistant to find deals on planned purchases, he said. Klarna’s virtual Visa card is compatible with Google and Apple Pay.
For now, people can apply to be on a waitlist for the card, which will be rolling out in coming months. Customers can pay for purchases either in stores or online. They will have the option after the fact to spread out the payments for a larger purchase across 3 to 6 months, with an interest rate of 33.9%. Or, they can extend the due date by one month, also paying 33.9% on that purchase. While that interest rate isn’t unheard of for BNPL offerings (though it can be far lower), it is high compared to typical credit cards, which tend to be closer to 30% at the high end, according to Nerdwallet.
“We want to offer payment option flexibility but we don’t want it to be like a credit card that builds revolving credit for consumers,” Fock told TechCrunch. “We see it as a problem that the credit card debt in the U.S. is hitting record levels, and we believe our options are healthier and more sustainable.”
Affirm’s debit card also provides consumers with the flexibility to pay upfront or request to pay over time via the Affirm app. And Apple too gives the option to pay in installments (though Apple’s APR taps out at 29.49%). Where Affirm differs from BNPL cards issued by competitors is that Affirm underwrites transactions made using its debit card, according to Affirm’s head of product, Vishal Kapoor.
Like other credit cards, or other Klarna BNPL options, if users pay off their balances before they are due, they’ll avoid paying interest, Fock says. “Our customers are typically looking for the free option,” he said. “We really want this to be an extension of how customers are used to using Klarna.”
Naturally, Klarna will earn interchange revenue as well as any interest collected.
The Stockholm-based company has seen success in expanding to the U.S., telling TechCrunch in February of 2023 that the country was its biggest market by revenue. (As of last November that momentum had continued with Klarna saying it had over 37 million users in the country alone). Today, Klarna said the U.S. and Germany represent its largest markets but that “the US is gaining all the time and is often largest on a quarterly basis.”
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Eight months after acquiring credit card startup X1 for $95 million, Robinhood announced today the launch of its new Gold Card, with a list of features that could even give Apple Card users envy.
Robinhood, better known for its brokerage app aimed at the everyday investor, is touting all sorts of benefits with its new card in an attempt to attract users. The card has no annual or foreign transaction fees. However, it will only be available for Robinhood Gold members, which costs $5 a month, or $50 annually. (Gold is a program that offers other benefits like 5% APY on an account’s uninvested brokerage cash.)
Gold Card users can earn 3% cash back on all categories, including restaurants and groceries, and 5% cash bank when booking travel at Robinhood’s new travel portal. That cash back can be transferred to brokerage accounts, which can go toward making investments like stock purchases, the company says. The ability to invest using cash back is the big innovation that X1 developed prior to getting acquired.
Another interesting feature of the Gold Card includes the ability to provide cards for family members. This is the first time that Robinhood has introduced a family-oriented financial product, Robinhood Money General Manager Deepak Rao told TechCrunch. Rao was the founder and CEO of X1 before joining Robinhood in the acquisition.
Users will have the ability to add up to five family members as cardholders to their account with every cardholder receiving their own card. Additional cardholders can be any age, giving parents a way to help teens build credit and monitor spending. The ability to provide cards to family members will extend even to those visiting from other countries.
“A user can provide cards to parents, children or caregivers and set the right kind of controls and protection, while also helping them build their credit,” Rao said. “They don’t have to provide any other information than their name and date of birth and Social Security number if they have one. If you’re worried about spending limits, you can put a dollar amount limit and also a child-safe mode for kids.”
The Card also allows users to create and delete virtual cards for one-time purchases and will have an APR of 20.24% – 29.99%, which Robinhood said will vary with the market based on the Prime Rate.
Robinhood is also making its physical cards numberless so if they are lost or stolen, users won’t have to swap out all their card information. The company is also launching a new app to go along with the new Gold Card that will be completely separate from its investment app, Rao said.
Generally, the Gold account offers up to $2.25 million FDIC insurance from a network of partner banks.
Robinhood’s entrance into the credit card market is clearly taking a cue from the likes of Apple, which has seen great success with its own card (despite hiccups with its partnership with Goldman Sachs). By forgoing hidden fees like annual or late fees, and by applying its cash back daily, Apple Card topped more than 12 million users as of January.
Many cards offer cash back but often restrict it to certain categories. This card is generous in its cash-back offer. Apple, for instance, offers 3% cash back on all purchases made at Apple, and on purchases made at select merchants when using the Apple Card with Apple Pay. In general, purchases made on Apple Card with Apple Pay earn users 2% back. But Apple also offers a Family Sharing feature, and a high-yield savings account offering 4.5% interest.
Obviously, Robinhood will earn interchange revenue from the credit cards, standard transaction fees paid by the merchants. It has earned interchange revenue off of its debit cards, which launched in 2018. Coastal Community Bank is Robinhood’s banking partner on the new Gold Card.
The new credit card is part of Robinhood’s evolving business model and offerings over the years. In December of 2022, the company announced Robinhood Retirement, which it described as the “first and only” individual retirement account (IRA) with a 1% match on every eligible dollar contributed. Gold Membership, a requirement to get the Gold Card, increases the eligible match to up to 3% match.
“There’s always been special perks and opportunities reserved for the wealthy that make them even richer. It’s why we started Robinhood…” Robinhood co-founder and CEO Vlad Tenev said in a written statement. “Today’s announcements…bring us one step closer to the goal of giving everyone better access to the financial system.”
You must be a Robinhood Gold card member.
You must first meet the following credentials in order to apply for a card:
You must be a Robinhood Gold member to apply for the card. It costs $5 a month, or $50 a year, to become a Robinhood Gold member.
Are there foreign transaction fees associated with a Robinhood Gold Card?
No, there are no foreign transaction fees.
Robinhood doesn’t do a hard pull on your credit until you accept the card offer.
Is Robinhood Gold FDIC insured?
Robinhood offers up to $2.25 million in FDIC insurance through a network of partner banks.
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This post was originally published March 26 at 4 p.m. PT, and has been updated to include Robinhood’s stream and additional remarks.
Hey, folks, welcome to Week in Review (WiR), TechCrunch’s newsletter recapping the notable happenings in tech over the past few days.
This week, TC’s auto reporter Sean O’Kane revealed how EV startup Fisker temporarily lost track of millions of dollars in customer payments as it scaled up deliveries, leading to an internal audit that started in December and took months to complete.
Elsewhere, Lorenzo reported how Facebook snooped on users’ Snapchat traffic in a secret project known internally at Meta as “Project Ghostbusters.” According to court documents, the goal was to intercept and decrypt the network traffic between people using Snapchat’s app and its servers.
And Manish wrote about the resignation of Stability AI founder and CEO Emad Mostaque late last week. Mostaque’s departure from Stability AI — the startup known for its popular image generation tool Stable Diffusion — comes amid an ongoing struggle for stability (pun intended) at the company, which was reportedly spending ~$8 million a month as of October 2023 with little revenue to show for it.
Lots else happened. We recap it all in this edition of WiR — but first, a reminder to sign up to receive the WiR newsletter in your inbox every Saturday.
Fisker suspended: Fisker’s bad week continued with a halt in the startup’s stock trading. The New York Stock Exchange moved to take Fisker off the exchange, citing its “abnormally low” stock levels.
AI-powered itineraries: In an upgrade to its Search Generative Experience, Google has added the ability for users to ask Google Search to plan a travel itinerary. Using AI, Search will draw on ideas from websites around the web along with reviews, photos and other details.
Robinhood’s new card: Nine months after acquiring credit card startup X1 for $95 million, Robinhood on Wednesday announced the launch of its new Gold Card, powered by X1’s technology, with a list of features that could make Apple Card users envious.
At AT&T, mum’s the word: The personal information of some 73 million AT&T customers spilled online this week. But AT&T won’t say how — despite the hack responsible having happened over three years ago.
Booming Copilot: Copilot, the budgeting app, has raised $6 million in a Series A round led by Nico Wittenborn’s Adjacent. The app is benefiting partly from the death of Mint, Intuit’s financial management product.
Liquid assets: In a piece looking at the wider VC-backed beverage industry, Rebecca and Christine note canned water startup Liquid Death’s recent $67 million fundraise, which brought the company’s total raised to more than $267 million. Talk about liquidity.
HVAC venture: Dan Laufer, a former Nextdoor exec, has raised $25 million from Canvas Ventures and others for PipeDreams, a startup that acquires mom-and-pop HVAC and plumbing companies and scales them using its software that helps with scheduling and marketing.
Is Nvidia the next AWS?: Ron writes about how there’s lots of parallels in Nvidia’s and AWS’ growth trajectories.
This week on Equity, the crew dug into Robinhood’s new credit card, Fisker’s latest woes and even Databricks’ new AI model that it spent $10 million to spin up. They also spotlit two companies building startups focused around kids, and, to wrap up, looked at a new $100 million fund that seeks to back innovative climate tech.
Meanwhile, on Found, Allison Wolff, the co-founder and CEO of Vibrant Planet, a cloud-based planning and monitoring tool for adaptive land management, discussed why the wildfires we’re seeing today are hotter and spreading more quickly than we can contain and how proper land management can help foster lower, slower-burning fires.
And on Chain Reaction, Jacquelyn interviewed Scott Dykstra, CTO and co-founder of Space and Time. Space and Time aims to be a verifiable compute layer for web3 that scales zero-knowledge proofs, a cryptographic action used to prove something about a piece of data without revealing the origin data itself.
Spotify tests online learning: In its ongoing efforts to get its 600 million+ users to spend more time and money on its platform, Spotify is spinning up a new line of content: e-learning. Beginning with a rollout in the U.K., the (traditionally audio) streaming platform is testing the waters for an online education offering of freemium video courses.
Robinhood’s new credit card was revealed Tuesday, and though it’s only available for Robinhood Gold members, the Gold Card does have a feature that’s spurring headlines: the ability to invest cash-back bonuses into investments.
The announcement comes eight months after the acquisition of the startup X1 for $95 million, and it just so happens one of X1’s biggest features was the ability to invest cash-back benefits. Coincidence? Obviously not! Robinhood is hoping that bonus, plus a slew of other perks, including the ability to add family members as cardholders, even if they’re young or without a Social Security number, will be enough to pull customers away from Apple’s pull.
But what gives with tech companies getting into the consumer credit game? You could argue that Robinhood’s choice to offer a card is just an extension of its already expanding portfolio of financial products. But Apple also has a card, recall. And the tech giant is getting deeper into the realm of personal finance as time goes along.
Tech companies expanding their product remit over time is not new — hell, I wrote about it back in 2014 — but it’s notable to see how day to day consumer finance is becoming a technology story. Hit the clip, let’s chat!
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