FinTech Friday: FCA warns investors over “world’s most secure card”

FinTech Friday is our weekly check-in here at Spreckley, where we share all the most interesting and useful financial services and financial technology news, innovations and trends.

This week, we look at the latest FCA warnings over Lanistar’s attempts to launch the “world’s most secure card”, the latest updates to Google Pay which are now live over in the US and calls from a senior Bank of England economist for better, more open data sharing to boost credit facilities for Britain’s small and medium businesses.

FCA warns over “world’s most secure card” 

The Financial Times reports this week that the UK’s Financial Services Authority (FCA) has issued a warning to investors on Instagram-hyped new fintech Lanistar.

Lanistar is a Mastercard-backed UK fintech that offers an anti-fraud payment card called Volt that it claims to be “the world’s most secure card”, with marketing on the company’s website featuring Instagram posts from footballer Kevin de Bruyne and model Demi Rose. Yet the FCA warned this week that the company “has been providing financial services or products in the UK without our authorisation”.

Lanistar is aiming for a unicorn-status £1 billion valuation, yet this may well be scuppered following this week’s FCA statement which reads: “This firm [Lanistar] is not authorised by us and is targeting people in the UK. Based upon information we hold, we believe it is carrying on regulated activities which require authorisation. Some firms act without our authorisation and some knowingly run investment scams”.

For its part, Mastercard has said that Lanistar “hopes to tap into the millennial and Generation-Z, 18-35 market, attracting customers who seek aspirational and lifestyle brands to enrich their daily lives.” 

Google Pay gets major update in US

Elsewhere, Google Pay has had a major overhaul this week, as Finextra reports: “The Google Pay app has been given a makeover, growing from a simple payments tool to a full-blown financial management service and, from early next year, a gateway to a full bank account.

“Available now in the US, the redesigned Google Pay Android and iOS apps focuses less on the user’s cards than their relationships with friends and businesses. Americans can make P2P, contactless and e-commerce payments, see past transactions, and find offers and loyalty info in a UI built around conversations.”

No news so far on a UK roll-out of the latest Google Pay features and services, but we will of course be sure to keep a close eye on this one and update you will any UK updates.

Better data sharing for UK SME boost

Finally this week, the Bank of England’s chief economist Andy Haldane has pushed for a new initiative to use Open Banking APIs to boost credit for Britain’s small and medium sized businesses.

Finextra reports how “currently, more than 50% of SMEs consider only one provider when seeking a loan, with a clear bias towards incumbents. Moreover, SMEs seeking to switch lender face a 50% higher chance of being rejected for a loan than existing customers.”

The Bank of England’s Haldane explained that: “Breaking down those well-entrenched barriers calls for a new infrastructure, one which expands the scale and scope of Open Banking – an Open Data platform for SMEs.”

Haldane is calling for a standardised means of permissioned sharing of data about businesses from various sources, including banks, insurance and utilities companies, credit rating and social media data companies, and Government sources such as the Passport Office, DVLA, HMRC and Companies House.

“The platform would run as a decentralised network of data providers using a standardised set of APIs,” said Haldane. “There would be no central data repository, physical credit file or central infrastructure. Instead, like the internet, the platform would be built around standard protocols that would enable interoperability between decentralised data providers and data users, with businesses having control of this process.

“An open data platform could play an important supporting role, especially among new, high-growth companies whose credit file will, almost by definition, be thin.”