← Fintech Insider Podcast by 11:FS
Fintech Insider Podcast by 11:FS
1015.News: PayPal launches BNPL in Canada, Coinbase expands into current accounts - and financial education hits the classroom
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A
Foreign.
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This is FinTech Insider News this week, money lessons head to classrooms across England. Coinbase launches interest accounts for British crypto users. And are you a fintech faithful or a traitor? Which Fintech behaviors could get you banished? We discuss we'll be tackling all of this and more on today's news show, so don't go anywhere. Foreign. Hello and welcome to episode 1015 of FinTech Insider, brought to you by 11Fs, the five time consultancy of the year that works with banks, investment firms, digital banks and fintechs to build the next generation of financial services. I'm Laura Watkins, director of media and marketing here at 11Fs and this week I'm excited to have been invited to the FF Awards on the 25th of November. That team always puts on a wonderful show. We're not doing our own awards this year, so not only is it great to go to an event I haven't organised, it's also brilliant to see someone else doing a non pay for play awards show and it's always just a mad night. I look forward to what they have in store and look out for the winners to be announced on the 25th. However, much closer to home. And speaking of excellent shows, we have been getting ready for our our next FinTech Insider After Dark event happening on Thursday 20th November at the Village Underground in Shoreditch. Expect a live episode of this very podcast. Food, drinks, plenty of fintech chat and maybe even the chance to meet some of your favourite fintech Insider hosts. If you're listening from London and haven't got a ticket yet, what are you waiting for? There's a link in the description below. But to get us warmed up for the event, we've got a panel taking a look at some of the world's top fintech news from this week. Let's meet them. So first up, a very warm fintech Insider returned to a former Arctic Dark panelists, Nicola Vanady, CEO of Swan. Welcome back to the show. Can you tell us a little bit more about yourself and your role at Swan, please?
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C
Yes. Hello Laura and thanks you for inviting me again. So Swan, we are an embedded finance platform and so we work with accounting software across the European Union. So what does that mean in practice? Means that software like for instance, pennylane, can offer full banking or payment services directly inside their own interface. It can be cards, it can be payments, it can be iban, especially local Ibans, which is something very important and so they can do that without becoming themselves a bank. So in a way we provide the same Features the same services you could expect from a digital native bank like Revolut, Monzo or tide in the UK, but it's fully white label and it's used through APIs. So it's a pure B2B 2B model and we serve the accounting software and the serve the end customers, usually SMBs, small and medium businesses. So today we serve more than 100,000 SMBs and we process over 25 billion euros of payment every year.
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B
Wow. Very impressive. Well, thank you so much for joining us again. Next up, we have another Fintech Insider return for Joshua Labak, Venture capital and innovation at the national bank of Canada. Welcome to the show. What have you been up to since you were last on?
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A
Hi everyone and thanks for having me again. Laura, always a pleasure to be here. Like so many of you and our fellow listeners, I've been just trying to keep up with all of the exciting, innovative things that are happening in fintech and in software development more broadly. Really a lot to keep up with, but a few concrete things I've been spending a lot of time looking at is testing the latest AI based code modernization solutions, exploring new ways to track data consumption and data lineage in a future looking multi agent infrastructure and adopting the new solutions that are helping us protect our customers online and on digital channels.
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B
So not a lot then? No, not a lot at all.
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A
It's been very calm.
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B
Awesome. Well that's definitely been keeping you busy. Thank you so much for taking the time to join us. And last but not least, it's a Fintech Insider news debut for Mike Saraswat, CEO and co founder of Stoa. Great to have you with us. I know we're going to be digging into Stoa a little bit later on in the show so I don't want to give away too many spoilers, but can you tell a little bit about yourself and your background?
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D
Hi everyone. Thanks Laura and the team, big fans of 11Fs for many years. So great to be on the show. Yeah, my background was this is my second innings, my first innings. I accidentally had the privilege of building some of the biggest fintech brands which we know now, including Starling Bank, Klarna Sum up understood banking as an service inside out and all sorts of SME acquisition, consumer, retail side. A big fan of what fintech can do overall. So I got addicted to building brands and acquiring customers. So I was like, oh this is very exciting, how about I go and.
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E
Build my own FinTech? So after 15 years I decided about three years ago to build my own.
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D
Fintech and we'll get into STOA in a bit more detail, but yeah, from an agency operator to now a fintech operator.
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B
Wow, quite the background. Thank you so much for that and excited to get your insights on everything that we're going to discuss on today's show. So let's get into it. Our first story today is that financial education is to be taught to school children in England. This was in the FT and caused a lot of excitement on our internal Slack channels as well. England is introducing financial education in both primary and secondary schools as part of a refreshed curriculum. The move is designed to teach children the fundamentals of money early on, including saving, budgeting and financial decision making. The initiative reflects growing recognition that financial literacy is essential in a world of digital payments, credit products and evolving financial services. The rollout highlights a shift towards embedding money skills into education, aiming to build long term trust and competence in the financial system. We heard from Louise Hill, founder of Gohenry the Money giving kids a head start in life as they learn to earn, spend, save and invest for her take on this announcement and this is what she had to say.
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F
After five years of campaigning, two governments and four Prime Ministers, a lot of positive noise, but really no action. Last week's curriculum and assessment review recommendation to make financial education compulsory on primary school curriculums in England in is absolute music to our ears. The fact that the government's also endorsed the review's recommendations makes it even more of a moment to celebrate because that means it's going to happen. It's what kids, teens and their families have told us again and again that they want. And it's crucial to ensuring the next generation receives a meaningful financial education that will set them up for future success. What we need to do now is ensure that it's really not seen as job done. We need to learn from the fact that just over 10 years ago when financial education was added to the secondary school curriculum, it hasn't worked well enough. We need to ensure money lessons form a compulsory part of the timetable. Teachers get the training that they need, expert resources are made available, funding is provided and that it's assessed. So we absolutely take last week's news as an incredibly welcome win. But the hard work starts now.
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B
Thank you, Louise. So Mike, as our UK based panelist, what was your take on this? I know, as Louise says, it's something people have been campaigning for for a long time. It's great to, to kind of hear that this is starting to get off the ground, but what do you think? Do you Agree with Louise that this is sort of where the journey begins.
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D
Yeah, 100%, I think, as a society and our education system was designed where we were training people in bulk to work for other people. And so the idea of getting financial literacy wasn't very high up. It's like, as long as you're obedient and you sort of get some grades that you need, you'll find a job. The job landscape is changing. The definition of what it is to be employed is changing. Sole traders are at a rise at all time. You know, the generation of entrepreneurship or the ones who do, you know, their own work is, is, is rising at the astronomical rate. So financial literacy in schools is absolutely essential. And this is only the beginning of the journey. I think it's compulsory. It's very important. Louise is, is. You know, I'm a big fan of Louise and, and Anne at Starling and so both, both stalwarts at their business bidder. Louise is absolutely right. This is just the beginning. If I was taught a little bit more, I would have been more confident. When I started my business when I was 22, I decided not to go to investment banking after coming out of lse, I was highly dyslexic. I used to speak faster than I speak right now, but I have learned.
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E
How to slow down a little bit.
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D
But I think financial literacy and financial confidence came very late in life for me. So, yeah, this is the right direction we're going in, but it's only at the beginning.
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B
Yeah, definitely. And I think, as I understand it, they're going to try and roll it out into maths lessons first and then take it into the wider curriculum, which obviously makes complete sense. As someone who is quite bad at maths, I have equally not ever really found anything that I studied in maths particularly relevant to my adult life. And I think also just changing that a bit to then make what you're doing kind of like rooted in realism. Another reason to get people interested in the subject, whether or not it's compulsory, is, is by the by, like, if people are not interested, they're not going to engage with it. And so, yeah, I think it's such an important thing because, as you say, with so many small businesses, sole traders, etc, it's kind of incumbent on the individual to teach themselves this stuff. And that can be a big burden of responsibility for the small business owner when, as we know, you know, small business owners have enough going on with actually running their business than also having to be an expert in the financial side of things. As well. So I think this would create a brilliant foundation. Josh, if I come to you next, what do you think of this? I don't know if anything similar exists in Canada, but in terms of early education of financial topics, what do you wish that you had been taught at an earlier age?
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A
We do have some foundations covered in Canada and it varies by province, what's taught and how, and some cases in economics courses, in others they're in math courses like what's being proposed in the uk. I think however, that it's still insufficient, it's not enough. I think it's such an important element of people's lives that it should be dedicated more time to further curriculum. And regarding what I think is the most important is that early decisions, early in your life compound tremendously over time. And so if you make poor decisions with your credit card when you're 18 or you start investing when you're 18, by the time you reach middle ages you'll be in a very different financial position and therefore it's so crucial for those concepts to be taught at a young age.
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B
Yeah, definitely. And I think research from Gohenry as well sort of says that you start your financial education, whether you know it or not, around sort of seven years old in terms of like understanding how money works and so on and so kind of tapping into that, you know, what children are perceiving and picking up at that age and actually developing that into an education could be super important to then, you know, those later in life decisions, as you mentioned. Nico, what was your take on this? Is there anything similar in place in France? And if not, would you like there to be? What do you think?
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C
Yes, well, first me, I love to teach that to my kids and I really like to talk about finance, banking. Actually I'm the one that's one who does for when we have new batches of employees. I do a banking 101. So I really teach every new employees about the basic of banking, but it's more about payment trails and this kind of thing. But still. So no, in France we don't have this kind of thing. So probably exactly like Canada, financial education exists in a way, but it's really scattered about across math, economics or civic education. But probably and I can see that with my kids that developed really a poor understanding of how saving credit, how does this work? And actually I think what the UK does for that is great and I would love to see such things in France. It's not even a topic, I had to search a bit about it and I haven't seen anything really strong about that.
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B
Oh, interesting. So it's not currently on anyone's agenda to sort of add that into the system.
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C
No, we probably have other issues at the moment than this one.
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B
Fair enough. Sort of the same question that I asked Josh if, you know, looking back on your school days or even later, like, what would you wish you had been taught about kind of money management at an earlier age?
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C
Yeah. So if I think about myself, I would have loved to understand risk, especially when I started to work. So I had the luck not to have a loan, student loan, or this kind of thing. So for me, my first paycheck was really something huge compared to my student life, I would say. And so I invested a bit with my money. I did it really the wrong way at the beginning, and I would have loved to understand a bit more about, you know, risk. So if you play 10 times to the casino, you're sure to lose some. This kind of thing that, that you. You understand after losing a bit of money. I would have loved to. To. To. To. To learn this kind of thing at school.
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B
Yeah, that's such an interesting point. You know, there's so much, particularly when it comes to, like, student loans, as you mentioned, you know, like, even things like the, the sort of compounding interest on it. Like you kind of found that out, like after the fact, as a student, that your loan was compounding all the time. You know, maybe I wasn't making enough attention in my own math lessons, which is, you know, likely. But even so, like, you know, people find out by doing a lot of the time, they're not necessarily taught.
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C
Yeah, so sorry, there is a topic about that in France again, and I'm sure that the same in many countries where students. There are a lot of business schools who push their students to take a loan and actually students don't realize it will be hard for them to pay back.
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B
Definitely. Mike, what would you add to that?
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D
Yeah, just I think, Laura, something you said about maths and I think, you know, being highly dyslexic and I was from the last. So I'm on the. I'm the older millennial. I'm 40 this year.
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E
So I was the last bit that never got tested for maybe, you know, dyslexia or anything like that, it was just corrected. You know, you could get the sorted school of hard knocks.
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D
But I think the only change I'd make in the uk rather than it being compulsory within maths lessons, because that to me is an immediate deterrent. Oh, I want it to be more playful. So it should be more like a case study. So just like Kellogg's business school, Stanford, you know, all these big American schools did do it in a very interesting way where they would give you a case study and go, hey, what would you do if you were in this situation? And they could be small case study studies, you know, you've got X amount of money and you want to do this or. But not to put it in mats because that just builds this resistance.
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E
Even hearing, you know, it's like, nope, I'm not going to study that. So. But yeah, maybe more playful and maybe.
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D
Not putting it into maths I think.
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E
Would be a good idea.
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B
Yeah, yeah, no, that's, that is an interesting point. And I think, yeah, just getting people like sort of interested in the topic more broadly rather than putting a label on it, it's is a potential win. Josh, I want to give you the final word on this kind of looking into the future. Do you think Fintech or financial services have a sort of role to play in kind of developing this education onwards from the school classroom outwards?
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A
Absolutely. And I think there's a lot of folks that are really interested in consuming, engaging, short content. We see a lot of financial influencers out there. I'd rather there be more protection around what they're saying, but there's a lot of room to come play to reach people in the way they want to get information. And I think most importantly is a lot of, especially teenagers want to be treated like adults in this respect and they want to be treated in a fair manner and spoken to with real facts and done properly. And Fintechs and banks can play a big role in helping that development.
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B
Absolutely. And finally, to finish this section, we have a voice note from one of our smaller FinTech Insider fans, Dylan, the son of one of our FinTech Insider hosts, Kate Moody, who told us exactly what he thought about the possibility of learning about money at school. Let's hear from him now.
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G
So at school you have to learn lots of things. One of the things that boys and girls have to learn about is how to spend money. So what do you think is the most important thing to learn about spending money? What's the most important thing to learn about spending money, do you think? Nothing at all. You ought to have any money when you're bigger.
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D
Buy a puppy.
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G
To buy what, sorry?
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B
A puppy.
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G
A puppy? No puppy. A poppy. Yeah.
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B
If somebody can buy a.
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G
You can buy a poppy. That's right. What else would you like to learn about money at school?
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D
Hiding.
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B
Apple tree.
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G
An apple tree. And you'd like to learn how to buy an apple tree. Anything else? Anything else you'd like to learn about? Money?
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B
Buying a bear. A bear.
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G
A bear. That sounds great. How would you go? How would you buy a bear?
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B
You just need to put him on the head.
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G
Put him on your head. Wow, you've got, you've got a lot to teach people.
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B
Thank you so much to Dylan for that. Now we know what Kate's got to get him for Christmas or otherwise she's got to take him on a bear hunt. But I'm going to move us on to our next story and we will catch up with Kate to see how that goes. Our next story is PayPal has launched a no fee, pay in four, buy now, pay later product in Canada. This story from Fintech Global. PayPal has rolled out its pay in four, buy now, Pay later offering in Canada, allowing shoppers to split purchases between 30 and 1,500 Canadian dollars into four equal interest free no fee installments over six weeks. Try saying that quickly. The service carries no sign up fees, late fees or hidden charges, making it a transparent option aimed at e easing cash flow pressures for consumers heading into the holiday season. PayPal highlights that it's available across millions of online, Canadian and global merchants and is backed by its purchase protection on eligible purchases. PayPal's internal festive spending survey found that around 60% of Canadian consumers who haven't used Buy It Now Pay later yet say that they might if there were no fees. So, Josh, as a resident Canadian on this recording, I'd love to come to you first on this. How do you think this announcement fits in, maybe for the benefit of our international listeners, into the kind of general spending landscape in Canada and then also under the lens that this has been launched, obviously in the run up to that sort of holiday period of gift buying and giving and so on. How might this sort of change that landscape in terms of how people manage their spending and budgeting?
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A
I definitely think it'll be a welcome addition. PayPal has been doing a lot of innovation over many years now and they're a key player in the Shintech ecosystem. And I encourage their innovation mindset and everything that they're trying to do, particularly as you mentioned, coming up to this holiday season where for many folks it's a bit of a tighter time of year, it's a bit tougher on cash flows. So it's surely welcome news. I do question the size of an impact something like this will have. Only about 5% of retail sales in Canada are done through E commerce, of which PayPal represents under 35%. So it's not that big of a needle mover either. In terms of global impact on the economy as a whole. I don't think too many merchants should expect this to meaningfully change their sales forecast for the season. That being said, I think everything that offers more options to consumers is a positive and some people will surely see the positives of this 100%.
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B
Can we just dig into that a little bit more? So E Commerce is really not a popular option in Canada. That's really interesting.
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A
I'd say 5% of a country's retail spend is still a big amount, so let's not underplay the total. But it's definitely not. We're very far off in the majority here. So no, it's not a huge driver. And adding to that, it's not the first option out there to defer your payments in certain ways. There are other buy now, pay later providers and many of the Canadian banks offer installment payments on their credit cards as well, which can be done for a much longer period. So rather than being over a couple of weeks like PayPal is offering, it can be offered between six or 24 months. Yes, they charge interest, but much lower than what's offered on a traditional credit card. So this is one additional tool that's being added to the lens here. But is it a big move or will it shift patterns in Canada? I don't believe so, but those views are my own.
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B
No, no, that, that's a great point. And yeah, I think obviously it's one good PayPal doing a survey of their own customers saying 60% of people would be happy to use this. But you know, if PayPal is a fraction of a fraction, you know, the numbers are coming down all the time. But you know, that is, that's a really, really interesting overview and thank you for that. Yeah, it's interesting to see that there's already players in this space. What do you. And perhaps. Sorry, sticking with you, Josh, just for a local perspective, how much of an impact do we think that the kind of fee free, specific nature of this product will make the difference? Because you sort of mentioned Klarna afterpay is similar already in the region plus banks equally doing something similar. Is that the USP here do we think?
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A
Definitely. Good. There'll be some users. But where I'm cautious about these type of statements is that it's also free to use your credit card if you pay it on time for up to 30 days. And so what is really that delta that's being offered here? It's only a couple of weeks. So once again, there's some consumers that will be truly pleased to have this. There might be other users of certain credit products or alternative buy now, pay later products that might want to switch to PayPal. But once again, I don't expect this to fundamentally change behavior.
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B
So fair enough. Mike, you were nodding there. What's your kind of take on this? Do you think this is good for sort of a financial inclusion point or perhaps the opposite? What's your thoughts?
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D
Yeah, being a student of behavior psychology pretty much all my career, and I completely agree with Josh, I am ideologically opposed to the idea of buy now, pay later and that's why I started stowing, which you will get to in a bit. But I think BNPL fundamentally gets on a large scale, gets people, especially young people, to buy things they don't need with the money they don't have. And STOA is trying to do absolutely opposite of that, where we are trying to get people to use the power of their savings to unlock the things they need to use. So I think the obsession about gamification, and I was in a way partially responsible for some of that in the early days. But it's in the early days when we were thinking back in 2015, 16, 17, I truly thought we were going to democratize credit for young people. I came out of university with a capital one card of 500 quid and I was like, oh, well, you know.
- [26:06]
E
You can only do so gorgeous on so many dates. What do you do? Okay.
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D
But beyond that, I mean, there is, sadly it turned into a machine that is not good for anybody. And I'm very clear about my opinions on this and I think it just creates a psychological incentive rather than an actual help. Now, there are some very unique use cases of it, say for example, for high earners with a firm in the us if you already have those cash reserves and you want to split your payment on an expensive holiday, or you're for financially savvy people or you're cooking like a sofa or something for expensive kitchen. Makes sense, but please don't. I just feel quite strongly about people who A, lack financial literacy, B being, you know, pulled into these kind of offers. I'm ideologically opposed to that.
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B
That's fair. Nico, what would you add to that?
- [27:06]
C
No, well, I fully agree with Mike. Even if, like him, I understand that sometimes it makes sense. I don't know, you can come in a town and you need to buy an electric bike, it's expensive, you need it to go to work, so sometimes it makes sense. But what I like about BNPL is for me, it's really the perfect example of embedded finance. And so since it's what we do at Swan, I find it interesting because you don't go somewhere else to get the credit and the credit really comes exactly where you need it in the user experience. You're buying something, you're in the flow and boom, the option is right here. And so this is what I like about the idea of bnpl. And yeah, most of the time, at least in Europe, from what I know, BNPL is free for end customers. The merchant pays the fees. This is a bit the principal for that. So I'm not really surprised by the news in Canada. So probably it was something specific to Canada, but this is how it works in Europe.
- [28:07]
B
In terms of the fee free offering.
- [28:10]
C
Yeah, sorry, in terms of fee free.
- [28:11]
B
Yeah, yeah, because that's being, yeah, as you say, it was sort of put across as the differentiator here, but often that is usually the case. But yeah, I like your point about it being almost the perfect example of embedded finance. But does that come with a risk kind of as what Mike was saying, in terms of it almost being so embedded that it's too easy perhaps.
- [28:33]
C
Ah, so this is a good question. And you know, this is a question of sometime in financial services you don't want. So most of the time when you think about user experience, you want to remove friction, you want people to go fast and sometimes in financial services it's good to add friction. I don't know, you don't want to sell your house in one click it must take one week and that's even one month and that's fine with that. And so, well, it really depends the amount. If you want again to buy a bike, to go to work, maybe you shouldn't spend one week for that, but maybe 10 seconds is too fast. So it really depends.
- [29:20]
B
Yeah, definitely that kind of almost deliberate sort of speed bumps to add the friction to make people sort of consider what they're doing can be useful in some cases. Josh, coming back to you, sort of what is you sort of don't think it's going to make a huge amount of difference on the merchant side. And if you are Klarna, let's say, or any one of the players that are already in the space, are you worried about this? Is this just healthy competition? What do you think?
- [29:52]
A
Great question. I'm not so familiar with their offers I haven't looked into the other Buy Now Pay later offerings in a couple of years. I know the first question I have is are there some of these that are free and so is PayPal really doing a big shift or is it just new for them to be offering this? I don't know, but it would be the first thing that I would think of. But secondly, I do think that Klarna Refer have built brands with their consumers. They're viewed as more almost a super app in many ways and therefore if you're used to using one or another, I'm not sure you'll very easily switch to another. You do have sometimes of loyalty and some greater value in that ecosystem. So I wouldn't be terrified in that sense. And from the merchant perspective, it's always great if your customer can come in and spend more on a transaction and defer that payments. It's a positive. But I see this as being a bit as a financial engineering, you're making someone pay a bit more now rather than later. Well, that's going to catch up to you in a while. And so for example, a normal behavior around the holiday holidays is you start saving throughout the year so that you do have that outflow to spend at Christmas or the other holiday events. Well now if you're paying this for the next couple of weeks or months after the holidays, you just have less for next year to come. So financial engineering doesn't add value to society. It's not injecting new capital, you're just using it in different ways.
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B
Just moving the same money at different points in the year and different pace in terms of the sort of broader landscape. Obviously in the UK there's been a lot of push for regulation of Buy Now Pay later kind of putting it sort of akin to the credit laws in the US is a little bit more incremental. Do you know where Canada is likely to fall on this? Is there a strong kind of of argument for it? In the same way that people get very bullish on the fact that Buy Now Pay later should be regulated over.
- [32:10]
A
Here, I do believe they need to comply to a lot of the consumer protection acts that are in place and there are some minimal protections that do protect consumers. Historically, one of the things that has been disliked by Buy Now Pay later is that the loans don't show up on the credit bureau reports. And therefore when you're underwriting your customer for other assets and loans, you don't have a full picture of their spending. So that's something that's been evolving and that's beginning to be added to the credit bureaus.
- [32:41]
B
Well, thank you so much. I think we'll keep an eye on this one, see if it really does make a difference or not, as the case may be, and kind of keep an eye on this one. Anza the sort of festive spending period is about to kick off. And on that note, we're just going to take a quick pause back shortly. Before we dive back into the news, a quick word about our latest Insights episode. Business onboarding shouldn't be this hard. But for mid market companies, multi entity structures, borderless founders and outdated KYC make it a nightmare. Host Benjamin ensor and experts from 3S Money unpack the mystery missing Middle Offshore Banking 2.0 and reveal how fintechs can finally fix one of the industry's biggest headaches. Tune in and see how the future of business onboarding is being built. Find it in the same podcast feed as this one. And now back to the news. And our next story is that Coinbase launches interest bearing savings accounts in the UK Historian Finextra Coinbase is launching a UK savings account that offers 3.75% AER interest with instant access, no minimum balance and full protection by the Financial Services Compensation Scheme. The product follows Coinbase's February 2025 registration with the FCA as a crypto asset firm which makes the UK its largest international market. The account is built in partnership with Clearbank and offers seamless fiat to crypto bridging, positioning Coinbase in direct competition with FinTech Super App peers such as Revolut. Coinbase describes the move as a bridge between traditional finance and the crypto economy, allowing users to earn interest on Fiat while accessing crypto services on the same platform. So there's quite a lot in that one. Mike, perhaps coming to you first on this, what was your take on this? There's two very big brands kind of coming together with a particularly high savings rate in the current environment. What do you think about that? Does that make this product particularly desirable?
- [34:53]
D
Yeah, I mean this is, this is an advertiser's wet dream, right? I mean it's like, oh, this is two big brands built with hundreds of millions of pounds or dollars of brand power being seen through the bull and the, and the sort of different cycles, ups and downs. I think it's just a marketing rapper really. I don't think there's particularly anything exciting about this. I mean just as a quick backstory. I know awful amount of this because sto I initially started as a stablecoin Origination company, which not a lot of people know. So we were going to do pound backed stablecoins and dollar backed stablecoins before stablecoins were cool.
- [35:40]
E
So I know an awful amount of this.
- [35:42]
D
We were working with some very, very bright people, sadly and we were working very closely with the regulators, so. But it's just the climate both in the US and UK was not there yet. Still not there yet. So I think this is Coinbase's way to. I think it's more a regulatory play alongside marketing play where they can see, okay, well look, if we can get our brand name out there with the wider, you know, fiat market and get them to start interacting with Coinbase the brand in some capacity and then at some point, oh well, I can buy something useful with my stablecoin then. Brilliant.
- [36:22]
B
So you think this is to attract new users rather than give existing ones a bonus 100%.
- [36:30]
D
Look, if you are already operating in DEFI and TRADFI simultaneously, you're already very savvy. So there's nothing, no news, right? If you operate in the Defi space and you are really yield farming and doing all that fun stuff, you're like 3.5%. What's that?
- [36:45]
E
They look down and they're like, oh, what? So it's nothing new and exciting. So it's really for what the Defi crowd would call normies, right? It's really for the normies to kind of come on board and open a Coinbase account. So it's the best marketing tool they could have ever done into the traditional finance world.
- [37:03]
B
Okay, I understand. Yeah, that is a good point. You mentioned that kind of regulatory play. Like how much do you think having that FSCS protection adds that kind of element of credibility of trust to the quote unquote normies that maybe are a little bit more risk averse to the kind of, you know, typical perception of the crypto space. Like, do you think that's the kind of like gold SEAL on this 100%.
- [37:29]
D
You know, Bestowa provides all the deposits, eligible deposits, FSC is protected and that's there's a reason why, right, so we're not going into trading and because if you want to go after a mass market, you got to make it as safe for them and you got to hold on to certain keywords. People are very time pointed, poor and so it's really about giving them the buzzwords that they can go, okay, like that know that safe, right? Here's the money, right? So, so I think FSC is definitely is, is being used in the right way.
- [38:02]
B
Okay, great. And then Anika coming to you. Obviously this has been developed in partnership with ClearBank, like a big sort of UK clearing bank and House. What do you think that those that partnership means for the wider landscape in terms of these two big brands coming together in a partnership like this?
- [38:21]
C
Well, well first just to talk about my end customers because my end customers are small and medium enterprises. It's interesting to see they are not interesting in crypto so far. So we have again 100,000 of them. We provide the banking services to them and in five years, years we've had zero demand for crypto. So maybe it will happen one day or another, but it's not near that. And SMBs are normies, as Mike said it previously. But yeah, what I find interesting is of course we have two brands bundling banking services and this is something that I find fascinating because if you look at the Fintechs in the years 2000 and tens, it was all about unbundling, you know, unbundling banking services. There was a startup, there were fintech only for accepting online payment like Stripe, for making international payment like Wise. And really the world was unbundling and bundling. Do only one financial service and do it the best way possible. And see the year 2020 I could see again, it's interesting to rebundle banking services. And so that's why I think it's very interesting to see two brands with the help of banking as a service provider, bundling again banking services. And well, if I look at what we provide, it's a bit the same for us. We build a lot ourselves as one, so we provide payment accounts with cards so we are directly connected to MasterCard for instance, we process all of our SEPA payments by ourselves. But well, when it comes to international payments we do it with Wise and nobody sees it. And when it comes to accepting card payments, we do it with Stripe. And again, it's something that nobody sees. But yeah, that's really how most financial institutions offer bundling services is by cooperating with other fintech. This is how it works definitely.
- [40:42]
B
And like the better. Oh, sorry. The less that you know about it, the better because it means that it's working. Right. Like that's the, the best bit, like.
- [40:51]
C
And most of the time in order to do that, the best way is to. It's better if you don't have to do two KYCs, of course, or three KYCs. This is the interest of having a big partnership and if you don't have to move money from one service to another if it's totally transparent for the end customers. These are the two only big things you have to do when you do a partnership with another fintech. You don't have to think about many, many things but that and well, one last thing about this saving account. It's interesting to see that this is really something that so SMEs are not very keen about crypto, but they are interested in saving accounts for sure. And this is something that is is really a hot topic in Europe. You can see many digital native banks offering this kind of interest bearing account. And interestingly there was a nice European fintech spico who raised $20 million one month ago. It's really embedded finance, but embedded finance only for saving accounts. So if you want to work with them and I think that's a very interesting startup.
- [42:07]
B
Brilliant, thank you. And Josh, coming to you. Obviously you mentioned kind of in the earlier story around like Klarna becoming a super app and offering kind of more capabilities under their umbrella. Clearly that's what Coinbase is trying to do here and the story even points towards them being in direct competition with Revolut. To Mike's point. I don't know if that's a marketing point to kind of try and force a competition with Revolut rather than it being real, but what's your take on that in terms of them becoming a sort of full stack financial platform and the opportunities that that might unlock for someone like a Coinbase?
- [42:43]
A
I think it makes a ton of sense. And we've seen the digital asset champions, whether it's Coinbase Finance or others, gradually make more and more moves into the traditional financial services world in some markets offering credit cards and other banking accounts and products. And it's just natural in this business model. Most people know that as a bank it's unprofitable to offer your client only one product. And that's why you have these big organizations with multiple lines of business that evolve over time to go and to make that investment and that cost of acquisition worthwhile. So it's only natural for some of these digital asset champions who have millions of users to, to start to think about how do I monetize them, what other products can I sell? And as they build up that trust, they build up that credibility. More customers are willing to shift some of their traditional banking needs and traditional assets to their platform. And that's what we're starting to see here in Canada. Coinbase recently announced a similar interest rate on USDC deposits. Similar type of idea, although it's not on fiat currency, but the notion of coming almost Coinbase will pay you a high interest rate to move your savings account over in one form or another is a recurring team and the point about them positioning themselves as a competitor to Revolut does make a lot of sense. I think more people in the traditional banking landscape have to start to take this more seriously that the biggest fintechs by users are not the Revolut starlights Mazos of this world. It's the Binance, the Coinbase in some of these providers that have multiple millions of additional customers and if they can convince their customers to shift their fiat banking needs to them, could be a big shift both for banks and for Syntex.
- [44:46]
B
That's such a great point. The kind of banking landscape, the banking battlefield is completely changing. If these guys who already have so many customers get involved. I know five, 10 years ago people were scared of big tech doing that and making that move and bringing their customers, but actually now it's, it very much could be these guys that end up championing it in this landscape. That's such a good point. I'm going to move us to our next story which is that new UK startup Stoa launches to offer an alternative to traditional interest based savings. This was on Fintech features. Stoa is a newly launched UK fintech startup offering Stoap savings accounts that instead of conventional interest rewards users with lifestyle perks such as subscriptions, devices and travel when they save. The company targets the large Port of UK savers sitting on idle cash, reportedly over 600 billion pounds, who are reluctant to invest but seek better alternatives to low interest savings. Stower's model positions itself as a third destination for money, meaning not spending, not investing, but saving with instant tangible rewards linking deposits to merchant perks via partnerships. But you know, don't take my word for it. We're delighted to have Mike here to tell us more about Stower. So please can you sort of walk us through the vision behind Stoa and why you kind of picked this kind of niche to focus on?
- [46:14]
D
Yeah, no, absolutely. So Stoa's vision is to transform your idle cash into new possibilities now that on a more immediate basis as a mission is to make your savings power your lifestyle now. I was just getting fed up with all the narrative. I've employed a lot of people over my 15 years of agency life and every time you give somebody a raise, they're still dissatisfied after a few months. It's like, why is your money not working hard enough for you? So there's a fundamental Problem with confidence, with money, spending money and not feeling it's actually working hard enough. And so that's, that's driven a lot of people in very risky things. So high risk trading, you know, crypto to a great extent, even though it has got good blockchain solutions. But generally the hype is all about, you know, X percentage returns, which is just not sustainable. So STO fundamentally was born out of that frustration that everyone just talks, is a talking shop. How can we actually provide a solution and a choice for anyone, whether it's a consumer or a small business. If you're sitting on idle cash, you now have a choice. And that's what STOA is trying to do for you. And we are not trying to compete with banks. I'm a guy who likes to win with everyone. So it's a win, win, win situation. So we work with banks, we work with infrastructure players, we work with merchants. We're in the middle and we want to unlock value for, for everyone who has idle cash, whether it's a consumer or business. So if I may just say that a lot of people say, well, well, everyone should be investing. Yes, you know, there's a heavy government narrative around that as well. So again, going back to being a student of behavior psychology, my father was a banker. And it's, it's quite funny. He's a retired old man now. It's. I said to him, dad, give me 10 grand, I'll give you 7%. You know, when we were doing, when.
- [48:21]
E
We were doing sort of our R and D research for the product, he said, no chance. And I was like, I'm funny, he's a tough crowd. And then, and then I went, dad, give me ten grand, I'll give your.
- [48:31]
D
Give you free pet insurance. And he went, what do you mean you give me free pet insurance?
- [48:37]
E
Got him. Right. So, so, so the idea is that.
- [48:41]
D
There are two sides of the human brain. Even if you are an intelligent, savvy investor, you have a optimized portfolio, you still have some bit of cash trash doing nothing. So I joke with everybody, you know, we're meeting partners. I was in Vegas, a CIO of Snowflake went on videos saying, it's one of the best innovations of Vegas Money 2020.
- [49:01]
E
And I was like, wow, this is, this is fascinating. We didn't even pay him to say that, which is brilliant. And it's fascinating that this is traveling.
- [49:09]
D
Across cultures, across countries, because fundamentally I say STOA should not exist. The only reason it exists is there is this behavior psychology, which is for Whatever reason, whether that's apathy, fear of investing or just pure indifference. Right. So they're sitting on about 614 billion as consumers here in the UK. About 200, 250 billion depending on whose research as SMBs or SMEs here in the UK. In the US it's about a trillion dollars of SMBs just sitting on idle cash, not doing anything, 35 million. So what we are saying is hey Pocket, with this full FSCS protect auction here in the UK and in return you get stuff rather than getting interest. And yeah, that's the idea. I mean it couldn't be easier save and get stuff. But it's fundamentally opposed to buy now, pay later where you have to spend, spend, spend to get stuff instantly. With stoa you save, save, save and get stuff instantly. It's also slightly different to the big Californian wave which we saw maybe five years ago where it was save now but buy later. Nobody is waiting to buy later.
- [50:18]
E
Which world do we live in? All those startups will fail, right? So we need to be in the world where people feel they got that instant hit and hopefully STO is going.
- [50:26]
D
To do that, but fundamentally making you become a better saver. So the last thing I'd say to that is it's like getting a kid to eat its peas and greens and getting the kid to say hey, eat your peas.
- [50:38]
E
And they eat the peas and, and go, wow, was that peas I just ate? And yeah, so it's that. So nobody really enjoys saving because it's such a long term drive. A little interest coming in here.
- [50:50]
D
You get the instant gratification upfront.
- [50:52]
B
Amazing. Well, thank you for that, for that outline, Josh, maybe coming to you. Obviously in the the US in particular, we're well aware of sort of like loyalty programs and rewards and those kind of things. But what about the Canadian market? Do you think something like this could, could work? What's your take on it?
- [51:11]
A
Yeah, Canadians love their rewards and loyalty programs and we're one of the markets with huge adoptions of credit cards. For that reason we have some of the highest interchange in the world and therefore some of the best rewards. And that definitely fuels that. More than 80% of Canadians have a credit card. And contrary to popular belief or stats that we often see that young people don't want credit cards, cards, actually the 18 to 34 year old demographic in Canada uses their credit card more often than the 55 plus age group. And so we definitely like rewards and we'd like to get things in return. So we'll see how that translates into your eventual entrance into the Canadian market. Mike.
- [51:59]
B
How about the sort of savings market in Canada? Is that like, you know, it's well documented that, you know, significant proportion of UK like don't have any savings or have limited savings. Is that sort of reflective in your market as well?
- [52:14]
A
Yeah, that's fairly similar. There's many people don't have a healthy amount of savings and it's a common problem. So yes, we're in a similar situation and the rate that's offered to customers for checking our savings account are also fairly low. So there is opportunity there to think about this differently.
- [52:38]
B
Great. Nico, what was your take? How do you feel about the sort of gamification of savings and sort of rewarding good behavior?
- [52:47]
C
I guess at first I really love the way Mike Pitcher is startup and I really understand all of this behavioral psychology so I love the idea and I think I would like to try it myself. Anyway, I'm just thinking about again my own end customers who are SMBs. So you could think that as business owners you are more rational than individuals, but actually I'm not that sure. And there's a lot of idle cash as well in SMBs. So Mike, if ever you have, I don't know, some ideas, I'm not sure they would be could be interested into Spotify. Well, why not actually? So yeah, I'm sure there is a lot to do not only for individuals in that market, but I'm sure that this company would work as well everywhere in Europe. So it's not like British or an American thing. Behavioral psychology is the same everywhere, so.
- [53:55]
A
It will calm down. Nico, Mike has to come to Canada before the rest of Europe. Once step at a time.
- [54:04]
B
Mike, they're fighting over you.
- [54:05]
E
I know, I know. This seems to be amazing. No, to Nico's point.
- [54:10]
D
No, absolutely. SMBs is a, is a huge, huge market and we've done an enormous sort of research around that and they, they, they are very similar in terms of their behavior patterns as consumers. So we, we'd love to do something with Swan. So yeah, let's, let's chat offline. Yeah.
- [54:27]
B
Your friend. First French customer.
- [54:28]
E
First French customer.
- [54:29]
A
Right.
- [54:31]
E
Do you know what's fun?
- [54:33]
D
Because I built so many fintechs and so many that I said no to working with and, and one of the core reasons was unless they have raised a substantial amount of money, there was no way they would ever. Especially if you're in a deposit taking game. Right. I mean that's why I call Coinbase's whole game around acquisition. It's so expensive. Look at what Revolut is doing, right? You get an email every now and then going, I'll give you 600 quid if you ever refer to a small business to me. 600 quid, right?
- [55:03]
E
And then that's just to get an account opened. Then on top of that you need that small business to put some money in it so they can make some interchange for you, right?
- [55:11]
D
So the actual cost of getting a SMB to put 10,000 quid in an account is so high, right? For consumer, they do it in anything between 150 to 200 and stuff like that. So the point being that either there were two types of businesses, either they were fintechs who were, we've raised so much money and we want to get into the deposit taking business. Okay, sure, makes sense. Or they were who had amazing distribution partnership networks. And I think we want to be the latter. We don't want to fight with anyone. We actually want to empower people like Swamp, you know, empower banks like Josh's where they go, well, just put Stowe in it. And one of the feedbacks we got from American credit unions and community banks, they were like, we are a small player, right? We are a small team. So we were like, oh, would you like to white label it, gray label it? And their feedback was, no, no, no.
- [56:02]
E
No, no, we need your name there.
- [56:04]
D
And we were like, why? So like, so that people think that when they want stuff for their saving, they think of stoic. We don't want them to think of a savings account because it confuses them. I was like, wow, this is brilliant.
- [56:15]
E
Let's go. So, yeah, so it's a bit of a honeymoon period for us. Let's see how long it goes.
- [56:22]
B
Awesome. Well, congratulations on the launch and yeah, do come back and let us know how it is going. On that note, we're just going to take a quick pause here. Back shortly. Okay, now for a quick look at one story we don't have time to cover in full, which is that 59% of UK SME founders abandoned loan applications midway. This was on Tech Funding News. New research from fintech lenders Juice Ventures found that nearly 60% of UK small business founders abandoned loan applications due to confusion, fear and shame. Shame. Despite SMEs making up 99% of UK businesses, the bank of England estimates that this contributes to a £22 billion SME funding gap. Founders with financial education request up to 48.6% more funding and raise twice as much capital. Highlighting the Link between knowledge, confidence and borrowing. Juice recommends plain language tools, financial education campaigns, advisory support, confidence, aware lending products and regulatory incentives to tackle behavior barriers. To tell us more about this new research, we have a voice note from the CEO of Guice, Catherine Chan.
- [57:42]
H
Hi, I'm Catherine Chan, CEO and co founder of Juice. We've just released a major research report that I think every fintech founder and lender needs to read. It's called Blind the Gap and it uncovers something shocking. 59% of UK small business founders are abandoning loan applications halfway through the process. This isn't about credit scores or business viability. It's about shame, confusion and fear of rejection. Over half of the founders we surveyed said they associate borrowing with failure. 42% feel embarrassed to ask basic questions and nearly a quarter have signed finance agreements that they didn't fully understand. The result? A 22 billion pounds funding gap that's holding back Britain's entrepreneurial economy. But here's what gives me hope. 60% said they would consider borrowing if better educational resources were available. 82% want plain language terms. And research from Oxford University shows that founders with financial education raise twice as much capital. There's a design failure in lending and fintechs are uniquely positioned to fix it. We need to build products that deliver clarity, control and confidence, not just capital. The full report is available now at juce's website and I would love to hear what you think.
- [59:14]
B
So thank you to Katherine for that. This is super interesting and as Katherine says, do go and seek out the whole report for all the details, but for me, the shame element that Katherine mentions is the most interesting and probably the most underreported when it comes to business owners or indeed anyone's relationship with loans in particular and money more broadly. And it really touches on the emotional side of our relationships with money and taboos around admitting that you might be struggling or you need an injection of cash, or frankly, that you don't, you don't understand what you're signing up for. Which is also super relevant to the conversation around financial education that we had at the very top of the show. If you're not taught in schools or anywhere else, it's kind of incumbent on you to do your own research and learn. And then it can be difficult to get access to the right information or to ask the right questions. While fintech endeavours to break down those barriers and use inclusive and accessible language. There's still a way to go, but it's nice to see the intention is there from both sides. Sides. And if you want to hear more about how UK SMEs can be further supported, then you want to come along to after Dart next week as Allica Bank CEO Richard Davies will be on our panel. Grab your ticket in the show notes below this episode. And finally now, time for something a little bit different to finish this week's news show. And this is Fintech Traitors versus Faithfuls. So we know many of you in our fintech insider community have been hooked on the conclusion of the UK version of the Celebrity Traitors. If you haven't seen it, the series follows a group of celebrities divided into traitors and faithfuls, with the traitors working to deceive and the faithfuls trying to uncover and banish them. Inspired by the show, we thought we'd play our own version today, but with a fintech twist. We've asked our panel to call out some of the most faithful and traitorous behaviors in the world of fintech. So for example, our hidden fees or opaque T's and C's say, or saying that you're a bank when you're not traitorish behavior and vice versa. Are you a faithful if your brand has transparent comms, earned wages, Access and secure KYCs, for example? Panel, what do you think? What would be the ultimate fintech traitor behavior? Mike, what do you think? And firstly, have you seen the celebrity traitors? Because this falls down if you haven't.
- [61:27]
D
I know of traitors. Being a founder, I don't have much.
- [61:30]
E
Time to watch all the episodes, but it's a big debate in the family whenever I meet them and Celebrity Traitor.
- [61:36]
D
Was brought up the other weekend. So yes, um, thinking on my feet here, I would say being on the topic of Buy now play late and Black Friday on its way. You know, sadly a lot of the stuff that will be sold to us as necessity is, is traitorous, I think in many ways. So please do, please do consume As I love Nico's point about friction, I can talk about it just as a separate thing. I think we need friction in certain things. So that's traitorish. So be careful when holiday shopping and consuming and the faithful thing to do is slightly contrarian view, but I think fca, especially the regulators here in the uk, taking a slower adoptive stance towards crypto is actually good thing, even though I'm a guy who had to pivot because of that. But I think it's a good thing for a wider public benefit.
- [62:45]
B
Interesting. Okay, thank you. Josh, how about you? What would be fintech trader behavior versus fintech faithful?
- [62:53]
A
I think top of my List of fintech trader behavior is selling to your customers that you'll never do the things that the banks do like charge a monthly fee and so on and the other elements and what we've seen at least in our market is once the fintech starts to scale they almost always revert to that. So you criticize it but three years down the road you're at the same place in terms of a good behavior. I would give a pat on the back to anyone that's due any company that's doing something that's bad for them in the short term but good for the long term loyalty of their clients. I think there's many examples of that and that's something that I've seen.
- [63:36]
B
Fantastic. Nico?
- [63:38]
C
Well, so I don't know this show, we don't have it in France but I understand it's a bit of a version of the good, the bad and the ugly so. Well, I can tell you about the ugliest thing I've seen in my career in banking. So I've actually seen banks do this thing, you know where the process direct depends before incoming transfers but really on a purpose because they understand that by doing that the result is that the customer gets pushed into overdraft for no real reason. So it's such a ridiculous thing and really you look at it and you say well it's just to take some fees to the end customers and so this practice has been banished actually but this is really something I've seen like it was, was you know a big thing like 10 years ago.
- [64:34]
B
That is definitely traitorous behavior 100%. So what would be fake.
- [64:40]
C
And well if look at the good. I really like the marketing of a digital native so not bank because but they, they offer accounts in Netherlands so it's called go Dutch. And really their marketing is a, is a, is about being transparent with their customers and sharing shar the money they get that is opaque. You know when, when there is idle money, well financial institutions make money about it. When there is a card payment, financial institutions make money about it and their goal is yeah to share this money back with their end clients which is neither than trying to put them overdraft.
- [65:24]
B
Fantastic. Yeah that is a, is a great example and just to conclude we asked our Pulse team here at 11FS for some of their, their faithful and traitorous behaviors in fintech and these were their suggestions. So they said in a similar vein to what you said Mike, actually to be a traitor is savings apps who lower their market leading interest rate presumably once they've hit critical mass of users and on the faithful side they shouted out Trading 212's 1.5% cashback feature and its 4% interest on uninvested cash, all the while prioritizing low cost investing through transparent FX and share lending fees. And they also shouted out Monzo and Starling adding a call status fraud detector into their mobile app, which was equally reflected as a new hero feature in the UK Feature Benchmarking Tool on 11 FS Pulse. This contributed to their higher score in the benchmarking and it's giving other banks something to aim for. If you want to learn any more about any of those behaviours, check out our ElevenFS Pulse Report 2025 and we'll leave a link in the show notes to this episode and equally on social if you have any other fintech Traitor and faithful behaviors to add to the conversation, please do get in touch. But on that note, that concludes this week's FinTech Insider news. Thank you so much to today's guests. Where can people find out a little bit more about you and your companies? Let's start with you Nico.
- [66:49]
C
So you can find out about Swan just on Internet swan IO and about me, you can find me on LinkedIn. Nicola Benadi I will answer to your mail. Be seated.
- [66:59]
B
Right, fantastic. Thank you so much.
- [67:02]
D
And Mike, yes stoa money so s t o a money. And yeah, look for Mike saraswat. There's only one of that on LinkedIn. I suppose. So yeah, he'll find me and I will answer.
- [67:16]
B
Excellent. Great suffix money as well. Josh, how about you?
- [67:22]
A
National bank can be found at NBC CA and I can be found on LinkedIn at. Joshua Leback I believe there's only one with an H. So here I am.
- [67:32]
B
Fantastic. Everyone's so easy to find. This is great. As for me, you can find me Laura Watkins on LinkedIn. I believe there is more than one, but only one that works for 11Fs and you can find me on 11fs.com or of course this podcast. Thank you so much for listening to today's FinTech Insider. If you like what you heard, please make sure to follow us on your favorite podcast platform of choice. And if you really like what you heard, why not share the podcast around? And as always, if you want to join the Conversation station, tell us your FinTech traitor, FinTech faithful traits. Find us on social media. Just search for 11fs or FinTech Insider or email podcast@11fest.com. Thanks again and goodbye.