Varo's banking charter milestone, more corporate cards and BNPL under the microscope

Welcome to The Interchange! If you received it in your inbox, thank you for subscribing and for your vote of confidence. If you read this as a message on our site, subscribe here so that you can receive it directly in the future. Each week, I'll take a look at the hottest fintech news from the previous week. This will include everything from funding rounds and trends to analysis of a particular space and hot shots on a particular company or phenomenon. There's a lot of fintech news out there and it's my job to stay in the loop - and make sense - so you can stay in the know. — Marie Anne

First off, I have to say that the past week has been one of the busiest fintech news weeks I've had in a long time. Wow. There's so much going on. Although I obviously can't cover everything, I have tried to fit as many as possible into this newsletter.

Before discussing the various news of the past week, let's talk about bank charters.

For those unfamiliar, according to Investopedia: "A chartered bank is a financial institution (FI) whose primary role is to accept and safeguard monetary deposits from individuals and organizations, as well as to lend money The specifics of chartered banks vary from country to country, however, in general, a chartered bank in operation has obtained some form of government authorization to do business in the financial services industry. charter is often associated with a commercial bank.”

In 2020, Varo Digital Bank became America's first fully digital nationally chartered consumer bank, meaning it received approval from the Office of the Comptroller of the Currency to become a bank real, as opposed to partnering with one as most digital banks do.

It was a bold and risky move. So I spoke to Varo CEO and Founder Colin Walsh to find out if it was worth it. His answer ? 100%.

To read my full interview with Walsh on how things have gone since, go here.

Mercury announced last week the launch of a new corporate credit card. Over email, a spokesperson told me that the Mastercard IO is designed to help startups grow their business. "It's a simple 1.5% cashback on everything, with no personal credit checks and the first step to qualifying for the card is having just $50,000 in a Mercury account."

The company added that a corporate credit card has been one of the most requested features from customers since Mercury launched in 2019. In fact, Mercury was actually planning to launch with a corporate credit card. credit as his first product, but instead opted to start by setting up a bank account instead, because "every founder needs a bank account to run their business…and [they] are the perfect base from which to create additional financial functionality". The move is admittedly an effort to carve out its own space against the likes of Brex and Ramp.

Meanwhile, European fintech Payhawk has announced its US launch with a focus on enterprise customers. As part of the move, it's also launching its — you guessed it — first credit card product in the United States. The move follows what a spokesperson describes as "a huge year" for the company: in the past 12 months, its revenue has increased by more than 520%. The company achieved unicorn status after expanding its Series B funding round to $215 million.

We're not done yet! Center, which was co-founded by former Concur CEO and co-founder Steve Singh and launched its own offering of corporate cards and expense software aimed at small and medium-sized businesses, recently said that during last year, he had tripled his clientele. "while retaining 94% of existing customers" and doubled the size of the company. This is particularly interesting because many current corporate card players often point to Concur as an incumbent they are trying to replace.

These companies, of course, join a plethora of others in the US that already offer corporate cards, including but not limited to Brex, Ramp, Airbase, Mesh Payments, and Rho.< /p>