Tuesday , December 10, 2019

Eye on Fintech: Payments Firms Attract Venture Funding; PSCU’s $100 Million Investment

Venture capital continues to flow to payments companies, which ranked among the top recipients of financial-technology sector funding in the third quarter, according to a new report. And credit-union services organization PSCU announced it will invest $100 million in its payments platform over the next three years.

Sweden-based Klarna, a provider of e-commerce payments infrastructure, scored the biggest investment—$460 million in August—in a global review of third-quarter financial-technology investments released Tuesday by New York City-based CB Information Services Inc., which goes by CB Insights. Another e-commerce payments provider, San Francisco-based Stripe Inc., attracted the seventh-largest investment, $250 million in an August funding round.

Both Stripe and Klarna are so-called unicorns, privately held companies with valuations above $1 billion. Stripe is valued at a whopping $35.3 billion, according to CB Insights, more than all but a handful of publicly held payments companies. CB Insights, a supplier of data services to investors, financial firms and corporations, pegs Klarna’s valuation at $5.5 billion.

Numerous other fintechs raised smaller amounts of venture capital in the third quarter, including payments providers and firms working to bring bank-like services to underbanked parts of the world. One of the biggest investments, $250 million, went to Brazil’s QuintoAndar, provider of a residential-rental platform that includes a guarantee of on-time payments for landlords every month, according to CB Insights.

Meanwhile, PSCU, formerly known as Payment Systems for Credit Unions, announced Tuesday it will invest $100 million to modernize and its existing payment platform, leverage cloud technology, and further enhance Lumin Digital, its digital banking platform. St. Petersburg, Fla.-based PSCU serves 1,500 credit unions.

“PSCU’s strategic priorities continue to focus on optimizing digital experiences, driving the ability to grow member engagement and delivering market-leading security solutions—all while delivering an unparalleled experience for our credit unions and their members,” PSCU president and chief executive Chuck Fagan said in a news release. “This significant level of additional investment will provide a further catalyst for these efforts.”

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