Rally fades, FinTech IPO index loses 0.6%
For the FinTech IPO index, the rally was swift.
After a surge into the first few weeks of the new year — notably a double-digit gain last week — the index fell 0.6% over the past five sessions.
Blame the macro data from this week, which showed a fall in retail spending. Blame it on the first salvos of the earnings season, in which banks signaled some reservations about the development of loans going forward – and they took billions of dollars in reserves for expected losses. Redundancies have dominated the headlines – and not just at Amazon and Microsoft.
Platforms take a hit
Platforms led the decline this week, with Blend down 13.7% on the heels of its own layoff-related news that had been relayed earlier in the month. The company said the 28% reduction in staffing levels comes as part of an effort to “right size” Blend’s cost structure.
Remitly lost 13.6%. As PYMNTS reported this week, the Consumer Financial Protection Bureau (CFPB) could reshape cross-border payments, specifically the hundreds of billions of dollars in remittances sent overseas. The CFPB is considering restrictions on the actual fees charged for each transaction as workers and families send money to each other around the world. The CFPB is also investigating the differences between money transfer firms in terms of disclosure of exchange rates and fees — and whether those fees are consistent with the agency’s own money transfer rules.
Marqeta gave up 5.7%. The company announced the debut of its new web push provisioning product. With web push provisioning, Marqeta customers can reduce friction at the point of sale and enable users to pay directly from their mobile wallets without requiring them to download a mobile application, as noted in Thursday’s release.
Hippo Insurance lost just over 1.2% in a week that saw the home insurer announce the success of its 2023 reinsurance program, with better terms than seen last year. Rick McCathron, CEO, said in the release, “Our expected loss rates are rapidly converging to our long-term goals, which drove our strategic decision to reposition our program.”
Not enough winners
Those losses helped offset – at least enough to tip the overall index to the downside – gains in Robinhood, which rose 26%. As PYMNTS reported this week, the company is getting deeper into the news business. As part of this initiative, it formed Sherwood Media, a subsidiary that “will be a home for news and information on markets, economics, business, technology and the culture of money.”
Paysafe gained 20%, announcing its expansion into the emerging Ohio online sports betting market after entering the Maryland iGaming space late last year. The expansion now means the company offers Ohio players a variety of payment options, including credit and debit card deposits, Paysafe’s Skrill digital wallet for both deposits and withdrawals, and other solutions.
Payoneer rallied 6.8%, and said this week that the company expects to beat its full-year 2022 guidance and has named Bea Ordonez as the company’s deputy chief financial officer.
PYMNTS data: Why consumers are trying digital wallets
A PYMNTS study, “New Payments Options: Why Consumers Are Trying Digital Wallets” finds that 52% of US consumers tried a new payment method in 2022, with many choosing to try digital wallets for the first time.
