Revolut, SumUp make moves in Mexico

• Key insight: Revolut and SumUp are among the fintechs investing in Mexico.
• What's at stake: There are more than 4.5 million small businesses in Mexico, many in the target audience for Revolut and SumUp's payment products.  
• Forward look: Both firms have plans to expand further in Latin America. 

The National Banking and Securities Commission and the Bank of Mexico have given London challenger bank Revolut clearance to operate a digital bank in Mexico. Revolut will be allowed to offer a comprehensive menu of financial services, including deposits insured by the IPAB, Mexico's version of the FDIC.
"We are very grateful to the authorities for this vote of confidence and their commitment to fostering competition in the industry, and we are confident that our offering will benefit millions of people across the country," said Juan Miguel Guerra, CEO of Revolut Bank S.A., Institución de Banca Múltiple, in a release.

Revolut is also pursuing a license in Colombia and a potential acquisition in Argentina, the company said. Revolut is building a financial super app in a number of markets, including the U.S., China and its home market in the U.K. As part of its effort, Revolut has introduced dozens of products as rivals such as PayPal and Block also rapidly add financial services, making these technology-focused companies a rival to banks. 

SumUp

SumUp expands to Mexico

As SumUp prepares for a potential IPO, it is accelerating its international expansion. The London-based company has launched in Mexico, including its SumUp Go card reader and other payment products designed for small to medium-size businesses. SumUp already has a presence in Columbia and Peru. 

"Expanding into Mexico marks a pivotal step in SumUp's strategic growth across Latin America. We see remarkable potential in the region," Andrew Helms, director general of SumUp Mexico, said in a release. SumUp cited statistics from the World Bank as evidence of market demand in Mexico. The country has more than 4.5 million small to medium-size businesses, with 94% being micro-merchants, or single-person proprietors such as repair people, vendors and landscapers. 

Michael Nagle/Bloomberg

Coinbase adds B2B payments tech

Cryptocurrency firm Coinbase is attacking what it says are extra fees and inefficiencies in international business payments by adding stablecoin technology for payouts and payment links that circumvent traditional processing. The payouts feature enables users to send the stablecoin USDC to a blockchain address or email, with payouts funded from USDC balances or a connected bank account. Recipients that do not have a crypto wallet can receive payments via email, then create a Coinbase account to claim their funds and cash out in their local currency. 

The links feature uses an application programming interface to support payments inside an app or e-commerce site. Coinbase is targeting developers and e-commerce sellers that use app stores to sell their products, arguing it can charge lower fees than the large technology companies that dominate the app store market — making Coinbase a rival to Google and Apple. Coinbase is also combining its Coinbase Commerce and Business units in the coming months to streamline its custody and payment processing services.

Gabby Jones/Bloomberg

Affirm expands Wayfair deal ahead of year-end profitability target

Affirm has updated its partnership with Wayfair to place Affirm's payments and buy now/pay later option at the point of sale. The partnership includes Wayfair's brand network, including Wayfair, Joss & Main, AllModern, Birch Lane and Perigold.

Consumers select Affirm on Wayfair's app, or scan a QR code in-store. Shoppers complete an eligibility check, and can see payment plans of up to 36 months. "Home is where many shoppers choose Affirm, and Wayfair has been an important partner in bringing that choice to life," said Pat Suh, senior vice president of revenue at Affirm, in a release.

Affirm is relying on its low or no-APR financing program and its debit card program to reach profitability by the end of the year. Analysts have praised the strategy, with JPMorgan Executive Director of Equity Research Reginald Smith saying, "Affirm is firing on all cylinders, delivering premium growth, improving profitability and consistent credit performance."

Tomohiro Ohsumi/Bloomberg

Japanese banks plot yen-backed stablecoin

MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank are teaming to issue a stablecoin, with launch scheduled for early 2026. The coin will be backed by yen, with a U.S. dollar-backed stablecoin planned for a later launch. The banks will embed the stablecoin into their payment systems, as a way to offer easier cross-border payments. 

While most stablecoins are U.S. dollar-backed, there are efforts to issue non-dollar stablecoins to counter American dominance. In Canada, The National Bank of Canada, ATB Financial, Shopify, Shakepay, Urbana Corporation, Wealthsimple and Purpose Unlimited recently invested in crypto technology company Tetra Digital Group to issue a stablecoin backed by Canadian assets. 

Simon Dawson/Bloomberg

Lloyds deploys self-service 'pay by bank'

Lloyds and hospitality technology company Lolly have collaborated on a kiosk that enables account-to-account transactions, or "pay by bank," a method that circumvents the need for a card network to process payments.

Consumers select "Pay by Bank" at checkout and make payment through their mobile bank's app. This transfers funds directly to the retailer's account, which can lower payment fees by avoiding card interchange.

"We've had a lot of fun trialling Pay by Bank in our own head office cafeteria with colleagues, and we're looking forward to seeing how this innovation evolves across the wider hospitality and retail space," Mark Prayel, product and platform embedded payments at Lloyds, said in a release. 

Account-to-account transactions are an older payment method, but have gained traction in the past two years as merchants look to reduce transaction costs. While the option is an alternative to card payments, Visa and Mastercard have both invested in A2A technology as part of their service-oriented product diversification strategies. 

Nathan Laine/Bloomberg

Paysend plugs into Visa to boost scale

U.K. fintech Paysend is expanding an existing partnership with Visa to make Paysend's Enterprise application programming interface available to Visa merchants and partners in North America.

Paysend's API enables businesses to embed Paysend's payments technology into their business technology. The Visa integration will add thousands of merchants to Paysend's addressable market. Paysend, which launched in the U.K. in 2017 and the U.S. in 2020, has partnerships with Visa and Mastercard.

The earlier Visa collaboration allowed Paysend's small-business clients to send money in real time to Visa cards in more than 170 countries. Visa and Mastercard have both used partnerships with payment technology companies to compete with fintechs that have targeted small businesses and consumers with alternative payment options. 

Bloomberg News

Travelex expands its business in Canada

Foreign exchange firm Travelex has added onshore wholesale banknote operations in Canada, targeting financial institutions and money services businesses. Travelex has onboarded more than 20 clients at launch, mostly retail bank and nonbank customers.

The firm will run a vault operation in Toronto at a former site of the Exchange Bank of Canada, extending Travelex's global network of vault sites to 13, including London, Hong Kong and Sydney. Travelex has hired Davish Bucktowar as Canada trading director in Moscow to lead the bank note operation. 

Bucktowar previously was senior director of financial institutions at the Exchange Bank of Canada, where he was in charge of the institution's banknote solutions.