💸 Musk Unveils X Money with Visa

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Hey Fintech Explorers—Welcome back to Money Explored, the essential Sunday newsletter to stay ahead in fintech!

February is here, and fintech isn’t slowing down. This week, we’re diving into some major shake-ups, from Elon Musk’s latest push into digital payments to a surprise fintech move from Trump. Plus, a strong earnings report from Mastercard is fueling optimism across the industry.

Here’s what we’re diving into:

• Elon Musk launches Visa-backed X Money, bringing payments straight to social media. 💸

• Trump unveils Truth.Fi, a fintech venture aimed at reshaping investment. 💰

• Mastercard’s earnings rally sparks fintech optimism, signaling strong consumer spending. 🚀

It’s all happening—and that’s just the start...

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Let’s dive in!

🌎 3 Major Stories

Dive into this week’s top Fintech developments.

Elon Musk Launches Visa-Backed X Money Service 💸

The Big Story 📰: Elon Musk’s social media platform X is making waves with its new digital payments service, “X Money,” set to enter the competitive fintech arena. Partnering with Visa, X Money will allow users to fund and transfer money in real-time through Visa debit cards. Although the specifics on how X Money will stand out from popular competitors like Venmo, Cash App, and Zelle remain unclear, it is suggested that creators on X will be able to receive payments directly on the platform. This partnership reflects Musk's ambition to morph X into an “everything app,” a vision he set forth after acquiring the platform in 2022.

Key Takeaway ⚡️: The launch of X Money with Visa highlights a significant shift in the digital payments landscape, marking Elon Musk’s ambitious attempt to penetrate a saturated market. For fintech enthusiasts and industry professionals, the key takeaway is that Musk’s vision of creating a “biggest financial institution” is juxtaposed against tangible competition and regulatory hurdles. With the looming question of fee structures and user acquisition strategies, X Money could reshape how social media and finance intersect, so startups and established financial services should watch closely to adapt and innovate in response to these developments.

Trump Launches Truth.Fi: Fintech's New Frontier 💰

The Big Story 📰: Trump Media and Technology Group (TMTG) is diving headfirst into the financial technology scene with the launch of Truth.Fi, a brand that aims to offer various investment products including cryptocurrencies, exchange-traded funds (ETFs), and separately managed accounts. This move comes as Trump's influence in the cryptocurrency market appears to have waned, but initial trading has already seen TMTG’s shares soar by over 10%. Set to launch in 2025, Truth.Fi intends to cater to a diverse range of investors, with personalized investment options and a focus on American companies. By partnering with Charles Schwab and Yorkville Advisors, TMTG aims to tackle the ever-growing demand for decentralized financial solutions.

Key Takeaway ⚡️: The launch of Truth.Fi represents a significant pivot towards fintech for Trump's media company and taps into the rising demand for alternative financial services among his supporters. By promoting "American First" investment strategies, Truth.Fi is positioning itself as a sanctuary for investors wary of traditional banking systems and big tech. This initiative not only aligns with larger trends in digital asset adoption but also reflects an appetite for financial sovereignty within the market. As the fintech landscape evolves, this venture could ripple across the industry, attracting attention from both potential investors and competitors. Fintech enthusiasts should watch closely as the Trump brand enters a sector ripe for innovation and disruption.

Mastercard's Earnings Spark Fintech Rally 🚀

The Big Story 🗞️: Mastercard Inc. reported a positive uptick in U.S. spending volumes, showcasing a 10% increase in switched volumes during the first four weeks of January, up from 8% in December. This promising trend contributed to a 3.1% surge in Mastercard's stock value, while competitors like Visa and Block Inc. also enjoyed gains. Though overall switched volume remained flat at 13%, Mastercard remains optimistic, with guidance suggesting low-double-digit revenue growth for the year. This optimism stems from strong consumer health and an increased focus on fraud prevention through advanced AI solutions, especially following the acquisition of Recorded Future, a threat intelligence company.

Key Takeaway ⚡️: Mastercard’s upbeat earnings underscore robust consumer spending and may signal a broader recovery in the fintech sector. The company's proactive stance on embracing AI-driven fraud prevention highlights the growing importance of cybersecurity in financial transactions. Investors should note how these results could positively influence competitors, helping them leverage similar growth opportunities. With Mastercard tapping into a largely unsaturated $165 billion market for services and solutions, the potential for innovation and revenue growth presents an exciting landscape for fintech firms and investors alike.

🔍 What Else We’re Watching

Keep an eye on these evolving Fintech Narratives.

• N26 Sees Surge in User Growth 🚀: German fintech N26 is celebrating a "great deal of momentum" after lifting a cap on customer growth imposed by BaFin. Co-founder Valentin Stalf reported a whopping 250,000 monthly sign-ups, outrunning the earlier limit of 50,000 set in 2021 over regulatory concerns. The bank, which has moved past its net loss phase, anticipates revenue growth of 30-40% this year, fueled by a diversified income model and a doubled marketing budget. With over 4.8 million active customers, N26 is gearing up for a major comeback in the competitive fintech landscape.

• Stenn’s Sudden Collapse Shocks Staff 😱: Stenn Technologies, once a trade darling valued at nearly $1 billion, has plunged into insolvency in a matter of days. Founder Greg Karpovsky’s decision to flee the UK just before the company’s British subsidiaries crumbled has left 250 employees reeling. In a haunting Dec. 4 call, Karpovsky spoke little, and a week later, he didn’t even show up to the meeting where many were laid off. This swift decline has left Wall Street buzzing and raises questions about the future of trade finance in uncertain economic times.

• Trade Republic Expands to Italy 🇮🇹: The Berlin-based fintech, Trade Republic, has officially launched banking services in Italy, marking its second major expansion this year. With over €100 billion in assets under management, Trade Republic plans to offer free current accounts featuring Italian IBANs and automated tax submissions through the Regime Amministrato system—making it the first international digital bank to do so. Co-founder Christian Hecker emphasizes the need for localized solutions to tackle the growing pension gap, as the platform aims to empower users with solid savings options amidst traditional banking challenges.

💸 Major Money Moves

Tracking big market shifts in Fintech this week.

• Highnote Hits $90M Mark for Expansion 💥: Highnote, a San Francisco-based card issuing and embedded payments company, has successfully raised $90 million in a funding round led by Adams Street Partners. This investment will support the launch of Highnote’s new acquiring service, allowing businesses to seamlessly accept card payments online. The company, which has now attracted a total of $145 million in funding, aims to revolutionize the acquiring landscape with its modern embedded finance platform. Founded by ex-Braintree executives, Highnote continues to strengthen partnerships with heavyweights like Mastercard and Visa as it powers up for global expansion.

• LemFi Secures $53M to Revolutionize Remittances 🌍: Fintech startup LemFi has just raised $53 million in Series B funding, aiming to simplify money transfers for immigrants. Targeting a global remittance market predicted to reach $1.3 trillion by 2032, LemFi allows users in North America and Europe to send cash to 17 countries, with zero transaction fees. This London-based platform has already attracted 1 million customers, facilitating $1 billion in monthly transactions, primarily to Asia. With fresh funding from Highland Europe and others, LemFi plans to expand its services and continue disrupting the costly remittance landscape.

• Formance Secures $21M to Build Fintech AWS 🌩️: French startup Formance, renowned for tackling ledger issues in the fintech space, has raised $21 million in a Series A round co-led by PayPal Ventures and Portage. With ambitions to transform into a modular platform akin to Amazon Web Services, Formance plans to expand its offerings beyond ledgers, including connectors and reconciliation tools. Their platform aims to simplify financial operations for developers, integrating with popular services like Stripe and Adyen. With fresh funding, Formance is gearing up to establish a New York office and boost its team size from 20 to 50 by 2025, solidifying its position in the fintech landscape.

Thanks for reading and have a relaxing Sunday,

— The Money Explored team