Sat. Jan 22nd, 2022

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Happy New Year Fintech Fam!

NFT is one of the FTs christened words of the year in 2021 after the market for blockchain-activated tokens exploded – even though their purpose was unclear. This week, Sid takes a closer look at how the gambling industry is trying to develop a use case for the latest buzzing asset class.

Following our last newsletter of the year on how overdraft policies are starting to converge at traditional U.S. retail banks and digital challengers, I spoke with Dave CEO, one of the fintechs most aggressive in targeting overdraft fees, on how his new public company plans to differentiate itself.

Our New Year’s intention is to continue to bring you sharp analyzes of the technological trends that are disrupting financial systems around the world. Here at FintechFT, we often highlight themes before appearing in other parts of the newspaper. Take for example insurtech, in which we dived in November, and was covered with a Lex column over the weekend. Do you have any feedback to help us stay on top? Email us at and

The players behind crypto

Yosuke Matsuda, president of the well-known video game developer Square Enix, had a gift for crypto-land on New Year’s Day: a wholehearted endorsement of NFTs, the metaverse and the play-to-earn blockchain games, where playing crypto-currencies can earn.

“From fun, earning, to contributions, a wide variety of motivations will inspire people to get involved in games and connect with each other. It is blockchain-based tokens that will make this possible. ”

Square Enix is ​​not the only gaming company hoping to get a share of the crypto hype. French publisher Ubisoft last year announced its NFT platform Quartz, which allows users to purchase cosmetic options or “skins” for your avatar, while Electronic Arts CEO Andrew Wilson said “collectible digital content” will play a significant role in our future “.

The games industry has long been looking for new ways to get users to pay for content. Lootboxes, which offer a random range of items for avatars, became endemic among mobile games in the mid-2000s and appeared in popular franchises such as Span Fortress 2 and Fifa. NFT proponents argue that blockchain items over games can be transferable and further stimulate virtual economies – skins resale markets exist, but they are unauthorized.

Blockchain games, such as Axie Infinity, has an even better pitch: they allow players to earn in-game assets that they can convert into hard cash. Square Enix’s Matsuda distinguished between consumers who “play to have fun” and those who “play to contribute”, create new content for the gaming world – and also make more money for gaming companies.

But when it comes to what gamers are willing to pay for, they are judicious. Looting was a constant source of controversy, with opponents comparing the mechanics to gambling. And monetizing user-generated content (UCG), traditionally seen more as a passion project than corporate craftsmanship, was a tricky business. PC store front Steam’s experiment with adding premium options to its UCG workshop in April 2015 provoked a mass setback and a u-turn by the gaming giant later that month.

As Ubisoft and others piled up, other gambling companies drew a line in the sand. Steam owner Valve announced a ban on NFTs from its extensive store in October. The new policy appears to be in line with Steam’s position that it bans items that have real value on the platform. In December, GSC Game World, the developer of the upcoming survival shooting game STALKER 2, overturned plans to offer NFTs after a loud backlash from fans. “The interests of our fans and players are the top priority for the team,” the developer said.

When it comes to blockchain games, there are questions about the sustainability of their economic model. Analysts argues that they rely on growth of new players to remain viable. Equally fundamental is how much entertainment they offer, says Edward Castronova, a professor of media at the University of Indiana and one of the most respected voices on the study of virtual economies.

“If it’s not something nicer than other things, people are not going to do it,” he said, emphasizing that companies can not simply rely on telling users how great their blockchain technology is. “You can not just say ‘we are excited’ and expect people to shop.”

Castronova is not a colored in the wool crypto-critic, adding that he sees possibilities for blockchain-based games to offer a real economic incentive – as long as it is not too cumbersome.

Turning games into even more gig-economy work is not so much an innovation – see the long and dubious history of “gold mining” in games like World of Warcraft. Simply putting “blockchain” on it may not be the winning field crypto’s true believers think it is. (Siddharth Venkataramkrishnan)

Quick Fire V&A

Every week we ask the founders of fast-growing fintechs to introduce themselves and explain what makes them stand out in a crowded industry. Our conversation, lightly edited, appears below.

I spoke with Dave co-founder and CEO Jason Wilk shortly before California-based fintech became one of the first companies to launch IPO late last week in late 2022. The Cuban Mark company is valued at $ 3.6 billion on its way to its public debut, but its shares lost about half of their value in the first few days of trading. Wilk points to the 2 million customers his company has acquired since launching a checking account last year and emerging product offerings such as a crowdfunding savings account as indicators of Dave’s growth potential.

How did you get started? Dave was born in 2017 to truly represent the everyday American who is kind of screwed by the big banks. Our first product was to help you avoid overdrafts by linking us to your bank and we would predict your upcoming accounts like Netflix, water or power and tell you how that upcoming account is going to affect your balance. If you run the risk of going negative on your account, Dave will see you up to $ 75 to go without interest to buy that tank of gasoline or groceries instead of paying that $ 34 fee to your bank.

So how do you make money? Instead of charging interest, we earn about 20 percent of our income from tips so that people can actually pay whatever they can afford or whatever they think is fair for that service, which ranges from $ 0 to a handful of dollars can be to help someone. We also make money from exchanger. Every time someone swipes their debit card, we earn about one and a half percent on every transaction. In addition, we receive referral fees from the Ubers of the World from our works council, which we [created to] help people get jobs at DoorDash or Instacart, and other gig economy employers.

Now that most banks offer more flexible overdraft policies, how does Dave plan to stand out? We do have a significant advantage even though we offer an excellent solution for overdrafts. What the Chimes and Capital One’s of the world did was give you access to some overdraft, but only if you’re a direct deposit customer. Dave is the only product where you can literally download our application, and our unique underwriting system allows you to access our extra cash within minutes of joining without requiring you to switch your entire bank to Dave.

Do you think overdrafts ever go away? It can be dangerous to say ‘no overdraft’ because a significant amount of people actually rely on overdrafts as a form of short-term credit. I think we will see innovations in how you give them the money they need without charging these big fees from them.

What’s next for Dave? We are really looking for the next excellent banking experience for the everyday American. We are therefore looking at products ranging from investment to credit building to larger loans at more reasonable prices. We think there is a real opportunity in this country to level the financial playing field, which is our new vision statement from the company we deployed last week

Fintech fascination

Wall Street adopts Crypto Trading power stations are muscling in the recalcitrant crypto markets and squeezing margins that indigenous crypto firms have enjoyed so far. Amid fewer arbitrage opportunities, these firms are turning to loans and decentralized financing products for growth, crypto-strategists tell the FT.

Year of the NFT Non-swinging signs have changed from a sub-billion-dollar market before the pandemic to $ 41 billion in 2021. This makes it almost as valuable as the global art market, according to FT analysis. As the market matures, NFTs begin to look more like financial products with some lenders accepting NFTs as collateral, and communities splitting ownership into equities, although regulators have not yet considered it an official security.

Monzo bounces back After fidgeting during the early days of the pandemic, Monzo ended 2021 with a victory when it announced Chinese technology group Tencent has invested in UK digital banking as part of a round of funding that the firm valued at $ 4.5 billion on New Year’s Eve. The valuation is an improvement from the round that the company priced at $ 1.25 billion in February, but it is still well below its primary UK digital competitor Revolut’s valuation of $ 33 billion. As international investors flock to digital banks, look at what one town is like navigate the refuge of brick and mortar banks.

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