European FinTech Association announces public launch
The financial services sector has been revolutionised over the last decade through the introduction of new and innovative technology.
This sweeping change means that consumers and businesses are now able to access financial services, banking and investment opportunities digitally and at the touch of a button.
Consumers across Europe also no longer need to visit brick-and-mortar banks or organisations to ensure their own financial wellbeing.
However, there is a consensus from industry players that this revolution is still in its early stages.
To drive further growth and the adoption of new technologies, particularly in light of the difficult circumstances many face as a result of COVID-19, fintechs across Europe have united to form the European FinTech Association (EFA).
EFA is a not-for-profit organisation that represents more than 20 leading fintech companies of all sizes across Europe.
It brings together the previously established EFAlliance and FinTechs4Europe to give one voice to those operating in the European fintech sector.
The organisation will operate against several key goals:
- To promote, communicate and develop cooperation and dialogue between fintechs in the EU.
- To deliver a consistent industry message and speak with one voice for the sector, while highlighting key developments affecting the industry and working on solutions.
- To advocate for and represent the interests of members at a political level, particularly in terms of interaction with EU institutions and relevant regulatory bodies.
To achieve this EFA will serve as a resource and forum for those in the industry. This will include the sharing of information, providing networking opportunities for members and policymakers and education opportunities.
It says: “Innovation and digitisation has introduced real competition in the EU, improving outcomes for consumers and businesses, empowering each and everyone in their financial decision making.
“By sharing our deep tech know how, we foster sound tech regulation that is beneficial for the overall EU financial market, making people see the advantages of technology for finance.”
The organisation aims to build a ‘digital single market’.
It supports, for example, the development of a strong single market for financial institutions that offers consistent consumer protection, future proof regulation and a competitive industry for both fintech startups and more established entities.
Similarly, it promotes safe and secure digital finance. Key to this will be the transparent use and protection of data and the building of risk standards across the EU.
By encouraging innovation, EFA aims to encourage consumers to look beyond traditional banking to fintech providers that deliver new, user-friendly technology.
Stripe backs Step - the digital bank for teens
The Series C round raised US$100m in capital from a number of backers, including Coatue, TikTok star Charli D’Amelio, actor Jared Leto, and Will Smith’s Dreamers VC, for the enterprise.
Step provides a free FDIC-insured bank account and Visa card to teenagers. The accounts are backed by Evolve Bank and there is no subscription charge for its usage. Users don’t pay for their accounts and there are also no overdraft fees.
The mobile banking app enables parents to set controls and limits on spending and encourage responsible finances. According to data released by the company, 88% of the platform’s users say this is their first bank account.
To date, Step has seen great success in the marketplace. The company has raised more than $175m from investors and now has 1.5m users.
Stripe, which was founded by Irish brothers Patrick and John Collison, previously led Step’s $22.5m Series A round in 2019.
Step's Series B funding round also brought in $50m, and has a distinctly celeb-tinged reputation with investors including Justin Timberlake and the pop duo The Chainsmokers.
Users get access to a free, FDIC-backed bank account, a spending card and P2P payments platform to send and receive money instantly.
CJ MacDonald, chief executive of Step, said the company is aiming to improve the financial futures of the next generation. “Step is the only banking platform that enables teens to start building a positive credit history before they turn 18 and does not charge fees of any kind.
He has previously spoken about the importance of financial literacy for young people. “Money is just one of those things where I think the more educated and equipped you are early, the better decisions you can make down the road,” he told . “And you can also prevent yourself from making costly mistakes. I mean, the average American doesn't have $400 in emergency savings and pays $350 a year in banking fees. If we can help this next generation just ultimately be smarter and more educated as it pertains to money, I think we'll all be better off.”
Kyle Doherty, managing director at General Catalyst and Step board member, explained, “Gen Z is flocking to modern financial solutions that can be easily embedded within their digital lives and Step has a unique model for how to do this right.”
The news follows on from Stripe’s recent announcement that it plans to acquire TaxJar. The fintech, which builds software for online businesses that automates the reporting and filing of sales taxes, will most likely be integrated with Stripe’s billing services.
Currently, No terms have been disclosed but the Boston start-up had raised more than $60m from investors including Insight Partners.
Stripe chief financial officer Dhivya Suryadevara said of the move, “With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally.”