The changes are designed to enhance the consumer experience of using Google Pay and make it a more competitive option against other payment methods.
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Digital banking startup Mercury is layering software onto its bank accounts, giving its business customers the ability to pay bills, invoice customers and reimburse employees, the company has told TechCrunch exclusively. The additional features puts the company in even more direct competition with the likes of Brex and Ramp, two rival fintechs that have for […]
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India’s mobile payments regulator is likely to extend the deadline for imposing market share caps on the popular UPI payments rail by one to two years, sources familiar with the matter told TechCrunch. The National Payments Corporation of India (NPCI), a special unit of the Reserve Bank of India, plans to extend the deadline for […]
© 2024 TechCrunch. All rights reserved. For personal use only.
Apple’s chief financial officer Luca Maestri challenged investor worries over an 8% drop in China revenue, by noting that sales in other emerging markets are growing.
“When we start looking at places like India, like Saudi, like Mexico, Turkey, Brazil…and Indonesia, the numbers are getting large, and we’re very happy because these are markets where our market share is [currenttly] low,” Maestri said Thursday during Apple’s second-quarter earnings call.
Revenue declined to $16.37 billion in China during the second quarter
“The populations are large and growing, and our products are really making a lot of progress within those markets,” continued Maestri. “The level of excitement for the brand is very high.”
One thing Maestri said there is verifiable: the populations in emerging markets are, in fact, large and growing. But Apple’s growth in those regions isn’t as rosy a picture as the executive attempted to paint, according to available data.
Net sales in the Americas — which would include places like Brazil and Mexico — were down slightly year-over-year from $37.8 billion to $37.3 billion, according to Apple’s Q2 2024 report. Sales in the “rest of Asia Pacific,” which would include emerging markets like India and Vietnam, were down 17% from $8.1 billion in the second-quarter of 2023 to $6.7 billion as of March 31.
To play devil’s advocate, Apple’s falling sales in those regions may have more to do with pricing than hype for the product.
Maestri noted that Apple has introduced several financing solutions and trade-in programs that “reduce the affordability threshold,” so that customers can buy in the top product range.
“That is very valuable for us in developed markets, but particularly in emerging markets where the affordability issues are more pronounced,” said Maestri.
Still, pointing to the beacon of hope that could be emerging markets may not be enough to settle down investors. China is Apple’s third-largest market, and it’s become a battleground of steep competition with domestic companies like Oppo and Xiaomi dominating the market. According to Counterpoint Research, Huwaei has has seen a massive swing in the country after being completely sidelined by U.S. sanctions. The firm’s phone sales increased almost 70% from the previous year, while Apple’s fell 19%. In September 2023, Beijing imposed bans on the iPhone for government officials in the workplace, echoing U.S. action against Huawei.
China and emerging markets aren’t the only downers on Apple’s balance sheet this quarter. The company also reported a 10% drop in iPhone sales across all markets. Apple’s slow adoption of AI versus competitors like Google and Microsoft have also potentially played a role in slowed down iPhone sales.
Despite unimpressive hardware figures, Apple still managed to beat Wall Street expectations. It also summoned a stock hike of more than 10% in after-hours trading, fueled by both an increase on services revenue and a massive $110 billion stock buyback — a jump over last year’s $90 billion purchase.
Investors on the call tried to get Maestri and Apple CEO Tim Cook to divulge some more details about its upcoming generative AI launches, which Apple has teased over the last few months, but the executives would only reveal that announcements were imminent.
We’ll be keeping our eyes out for Apple’s Worldwide Developer Conference for more news.
Pomelo, a startup that combines international money transfer with credit, has raised $35 million in a Series A round led by Dubai venture firm Vy Capital, TechCrunch has exclusively learned. Additionally, the company is announcing a $75 million expansion of its warehouse facility.
Founders Fund and A* Capital also participated in the financing, along with early investor Afore Capital, and others.
The deal brings total funds raised to date to $55 million in equity capital and $125 million for its warehouse facility. TechCrunch covered Pomelo’s Founders Fund-led $20 million seed funding in 2022.
New backer Vy Capital is an under-the-radar investment firm that has grown to over $5 billion in assets and made headlines for backing Elon Musk in his purchase of Twitter.
Pomelo’s new round was among Keith Rabois’ last deals before recently leaving Founders Fund for Khosla Ventures, and he continues to sit on its board.
“Both Keith Rabois and Kevin Hartz went super pro rata on this round,” Pomelo founder and CEO Eric Velasquez Frenkiel said in an interview with TechCrunch, describing the Series A round as “preemptive.” He declined to reveal valuation, saying only it was an “up round.”
Hartz serves as the co-founder and general partner at A*. Previously, he also co-founded Eventbrite and Xoom, an online money transfer service that went public in 2013 and was acquired by PayPal for $1.1 billion in 2015.
In a written statement, Rabois said that “Pomelo stands out through a fundamentally different approach to remittance transfer by using credit as its foundation.”
Pomelo launched in the Philippines in 2022, allowing people in the United States to send money to the country while at the same time building their credit. In other words, Pomelo has built a remittance product on credit card rails.
Specifically, the startup has struck up an agreement with Mastercard to create what it describes as a product category called “Send Now, Pay Later” (SNPL), which it claims is “faster and with no transfer fees” as compared to traditional cross-border money movement.
Image Credits: Pomelo
Pomelo works by allowing a user to set up an account that comes with credit cards. The creator of the account can set limits, pause cards and view spending habits.
Senders can give cash, in the form of credit, to family members — which the startup thinks will help with instant access to funds, fraud and chargeback protection and, for potential immigrants that may use this to send money back home, a way to boost one’s credit score with more transaction history. In the event that someone cannot pay, Pomelo charges a late fee, “so there is no interest on the product,” Frenkiel said. The company makes money mostly through interchange revenue, and foreign exchange is a smaller component.
Since its 2022 launch, Pomelo has added new payment options including most recently, the ability for users to send funds to GCash, a popular e-wallet (similar to Venmo in the U.S.) in the Philippines, in addition to cards. (According to a recent article by STL Partners, 67% of Filipinos use GCash.)
This ability is particularly important in a country like the Philippines where proof of ability to pay can be required before medical treatment, Frenkiel said. He relates the story of customer Danette Flores, a nurse who sends money to two family members in the Philippines with Pomelo.
“My mom had suffered a heart attack, and she needed to be transferred to the ICU, but the hospital required proof of payment for that. My brother used his Pomelo Card to get her admitted,” Flores said.
Pomelo offers customers two options: either an unsecured credit line or a secured credit line based on its underwriting criteria at this time. The non-revolving credit line for unsecured customers gives them the ability to transfer up to $1,000 a month. On the secured side, a customer can put in a security deposit. In other words, Pomelo can hold funds in the app that effectively can be used to open a credit line.
The startup’s new capital will go toward product and market expansion. Pomelo’s next target country is Mexico.
“Mexico is certainly the largest corridor for the United States — something close to $40 billion is sent over to Mexico every year,” Frenkiel said.
Presently, Pomelo has 55 employees in the U.S. and Philippines.
As Christine Hall recently reported, cross-border fintech is hot right now. The cross-border payments market is forecasted to reach over $250 trillion by 2027, according to the Bank of England. And experts say fintechs are giving banks a run for their money (pun intended) here, especially in the business-to-business sector where artificial intelligence, machine learning and blockchain come into play — all emerging technologies fintechs love.
But there are other startups focused on the consumer market, including Alza, a startup aimed at helping meet the various banking needs of Latin or Central Americans who have moved to the U.S. With Alza, users get an FDIC-insured checking account and debit card. They also get the ability to send cross-border remittances to more than 20 countries in Latin or Central America embedded in its app via three methods, depending on the recipient country: bank transfer, cash pickup or transfer to a debit card. That company quietly raised $6.6 million in a round led by New York-based Thrive Capital in late 2021.
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Google Wallet will finally launch in India — nearly two years after its relaunch as a digital wallet platform in the U.S. — according to a preview of the app that the company accidentally posted on the Google Play store in the country.
After TechCrunch spotted the listing for the app — which will let users load up loyalty cards and buy things, among other features — the company declined to confirm that it will be coming soon to Android users. But it then appear to pull some of the details from the listing, such as what appear to be high-profile launch partners local to India. (The app now more generically features U.S. brands.)
Somewhat confusingly, Google did confirm to us that it will continue to run Google Pay as a standalone app in the country, at least for now. That’s a different strategy from just about every other market, where Google has been merging Wallet and Pay experiences together under a single Wallet app.
“While we don’t have anything new to share right now, we’re always working to bring more convenience to people’s digital experiences in India. We’re continuing to invest in the Google Pay app to give people easy, secure access to digital payments,” a Google spokesperson said in a statement to TechCrunch.
We understand that part of the reason seems to be that Google Pay is already massive in the country — it’s largely understood that India is Google’s largest market globally for payments, and it’s the second-largest payment app after PhonePe.
Not least because Google has confirmed its plans to continue to offer Google Pay as its payment service in India, the Indian version of Google Wallet is expected to differ from that of the U.S. For one, Google is looking to provide local integrations on the Wallet app in the country, which houses its biggest Android user base.
The Google Wallet listing that TechCrunch spotted last week featured screenshots of Indian airline Air India, state-owned bank State Bank of India and multiplex chain PVR Inox, suggesting that loyalty points can be picked up and used through these brands. (Shortly after TechCrunch reached out to Google for comment, Google updated the listing with U.S. brands.)
Image Credits: Google Play Store screenshots
The existing Google Wallet app is not available yet for download through the Play Store in India, but it has been working for some Android users in the country for some time, as reported by the Indian outlet Beebom. However, functionality is limited: users can add credit and debit cards for contactless payments, but the app does not support any Indian businesses and local loyalty programs.
These latest changes cap off a lot of bouncing Google has been doing between various financial services and differently-branded apps. Google Wallet was launched as the company’s payment solution way back in 2011. Then, Google launched Android Pay. Then, it tried to replace the Wallet and its Android Pay app with Google Pay. In 2022, Google relaunched the Wallet app as its digital wallet platform for Android, Wear OS and Fitbit OS. However, in February this year, the search giant announced it would replace Google Pay with the Wallet app in the U.S.
Unlike its U.S. version, Google Pay in India uses the Indian government-backed framework Unified Payments Interface (UPI) to enable payments. This is one reason why Google Pay is different in India, and also one reason why it might choose to continue giving users a separate option if they are already using it.
Google Pay is the second most used UPI app in India after Walmart’s PhonePe, giving Google an apparent reason to continue to support it while offering digital wallet-related experiences through the Wallet app. The Google Pay app initiated more than 5 billion transactions valued at over $83 billion in March, per the data posted by the UPI-parent organization National Payments Corporation of India.
Sam Bankman-Fried, the co-founder and former CEO of crypto exchange FTX and trading firm Alameda Research, was sentenced to 25 years in prison by Southern District of New York (SDNY) Judge Lewis Kaplan, about five months after he was found guilty on all seven counts related to fraud and money laundering during his trial.
“When not lying, he was evasive, hair splitting, trying to get the prosecutors to rephrase questions for him,” Kaplan said on Thursday, according to Inner City Press. “I’ve been doing this job for close to 30 years. I’ve never seen a performance like that.”
Before sentencing, Bankman-Fried acknowledged in court that he made a “series of bad decisions,” but argued they were not “selfish” ones.
His possible total sentence for the seven counts — two fraud charges and five conspiracy charges — was a maximum of 110 years. Bankman-Fried was also ordered during the sentencing to pay forfeiture of $11 billion to the U.S. government. Kaplan said that the “punishment,” or sentencing, was to fit the seriousness of the crime.
Earlier this month, U.S. prosecutors from the Department of Justice called for a “necessary” 40- to 50-year sentence for him. “The sheer scale of Bankman-Fried’s fraud calls for severe punishment,” the notice stated. “The amount of loss—at least $10 billion—makes this one of the largest financial frauds of all time.” On Thursday, Kaplan said that range “would be more than necessary.” In late February, Bankman-Fried’s attorneys filed a notice suggesting their client gets 63 to 78 months, citing his “caring for individuals,” “remorse,” “low-level culpability” and more.
Regardless of what both parties wanted, this decades-long sentencing is a result of Bankman-Fried’s five-week trial, which dove deep into how one of the once-biggest crypto exchanges globally, and its sister trading company, collapsed in November 2022.
His sentence could also send a signal to the crypto industry at large. As Judge Kaplan is required to consider the “need for the sentence to afford adequate deterrence,” aka to discourage other white-collar defendants and for bad actors in the crypto space more generally, Josh Naftalis, a former federal prosecutor now with Pallas Partners in New York, told TechCrunch. “In other words, the court is permitted to consider how the sentence it imposes on SBF will send a message to the crypto asset industry.”
Mark Bini, who’s also a former federal and state prosecutor and now a partner at Reed Smith’s On Chain digital asset group, agrees. The sentence will be a “real marker in the crypto arena,” he said, adding that this outcome “may be a measuring stick for future sentencings involving crypto fraud.”
And in the federal system, there’s no parole. But, defendants like Bankman-Fried can earn “good time” credit, under the First Step Act, which could reduce their sentence for good behavior while incarcerated, both lawyers noted. There’s a number of opportunities for first-time non-violent offenders to earn reductions in their sentences, Bini said. This can result in a defendant’s sentence being reduced by up to 15% of the initial sentence imposed,” Naftalis added.
Bankman-Fried has been residing in the Metropolitan Detention Center in Brooklyn, New York, ever since he lost his bail prior to his trial. Other notorious past inmates of the correctional facility include Jeffery Epstein’s accomplice Ghislaine Maxwell and “pharma bro” Martin Shkreli.
Before prison, Bankman-Fried was once on top of the crypto world, hanging with celebrities like Katy Perry and trophy-winning athletes like Tom Brady and putting his company name on Major League Baseball umpires’ shirts and the Miami Heat arena. Prior to its collapse, FTX was one of the top crypto exchanges by volume, behind Coinbase and Binance.
FTX grew its users into the “millions” before its collapse, and revenue expanded from $10 million to $20 million in 2019, to $80 million in 2020 and to $1 billion in 2021; and daily revenue in 2021 was $3 million, Bankman-Fried said during his testimony.
But Bankman-Fried quickly dwindled in popularity and trust across the crypto community after a faulty balance sheet from Alameda was unveiled by crypto media publication CoinDesk in November 2022, causing industry-wide ripple effects and concern around FTX and its liquidity. Within days, the exchange filed for bankruptcy and Bankman-Fried stepped down from his role as CEO.
His trial, and the months leading up to it, uncovered that the problem was much larger than originally thought as Bankman-Fried and other executives misused over $8 billion in customer funds. Bankman-Fried testified that he didn’t defraud FTX customers or use their funds, but that Alameda “borrowed” that capital from the exchange.
Mark Cohen, Bankman-Fried’s lead attorney, also said the government made a Hallmark movie–like case against Bankman-Fried and while he made “bad business judgments” the government has “tried to paint Sam into some sort of villain, some sort of monster.”
In the end, the jury didn’t buy that narrative. Prosecutors strongly argued Bankman-Fried made a number of false promises internally and externally and was responsible for the loss of billions of dollars for thousands of FTX investors. They emphasized how it was wrong to use FTX customers’ funds without their knowledge or approval.
And as a result, Bankman-Fried will be spending quite some time behind bars.
The article has been updated to include additional details in the third and forth paragraphs.
We last checked in on Zaver, a Swedish B2C buy-now-pay-later (BNPL) provider in Europe, when it raised a $5 million funding round in 2021. The company has now closed a $10 million extension to its Series A funding round, bringing its total Series A to $20 million. Total investment to date stands at $30 million.
In Europe, Zaver competes on BNPL with Klarna, PayPal, and incumbents such as Santander and BNP Paribas.
However, Zaver’s schtick is it claims it can assess the risk on BNPL cart sizes of up to €200,000 in real time due to its risk assessment algorithms. Other BNPL providers rarely fund anything beyond €3,000, at least in Europe.
Founded by Amir Marandi and Linus Malmén in mid-2016, while both were students at the KTH Royal Institute of Technology in Stockholm, the company has a strategic alliance with the Nissan Group for direct-to-consumer sales in the Nordics, and it has client relationships with Volkswagen and Porsche.
This allows customers to buy even a car on BNPL.
Marandi, CEO and founder, told me the company is able to offer size-agnostic payment solutions because it’s spent most of its product development not “on linear regression models (like the others) but on advanced risk assessment algorithms.”
“While our competitors have concentrated their efforts on marketing, our focus has been resolutely on the back-end engineering side of things,” he said.
He thinks the declining acceptance rates for larger transactions in the payment industry means an opportunity for a “size-agnostic payment platform” going up to as much as €200,000.
This may be where the BNPL industry is heading.
Early innovators like Klarna, Trustly, Tink, and iZettle capitalized on this shift to online payments, but the expansion of e-commerce infrastructure has set the stage for an increase in the average online transaction value.
This shift first appeared in 2012 when Elon Musk proposed selling a Tesla online, and now today many OEMs are attempting to go “direct-to-consumer” using BNPL.
Investors in the Series A include FROS Ventures, Hållbar AB, Hobohm Brothers Equity, JOvB Investments, MAHR Projects, Skagerak Ventures, and the King.com founders, Sebastian Knutsson and Riccardo Zacconi.
Founded in 2017, Atoms Lanka Solutions is a provider of IT consulting and software development services. Throughout the company’s history, we have worked with over 160 customers from 5+ countries..
