NovoPayment’s $20Mn Investment; Google Pay Offers Afterpay BNPL; Robinhood Acquires TradePMR
Rent inflation may not stabilize until 2026. Consumers report increasingly being declined for credit. Auto loan delinquencies on the rise. Chopra pushes Congress on expanded deposit insurance. Morgan Stanley invests $20Mn in NovoPayment. Solvento lands $12.5Mn Series A. Goldman may spinout blockchain business. Google Pay to support Afterpay BNPL. Robinhood acquires TradePMR.
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Rent Inflation Won’t Normalize Until 2026
New analysis from the Cleveland Fed suggests it may take until mid-2026 for rent inflation to normalize. Although some indicators suggest rent costs are coming down, a slowdown in the number of households moving and signing new leases means CPI doesn’t incorporate as much turnover. The delay in rent data may make communications more of a challenge for Fed policymakers, particularly if they continue to cut rates in the face of what appears to be CPI numbers in excess of the Fed’s long-term 2% target.
Meanwhile, consumer demand for credit has remained fairly stable, according to Fed data, but the rates at which consumers are being rejected have risen across all categories this year. According to survey data collected in October, loan rejection rates rose to 21% this year, up from 20.1% in 2023 and 17.6% before the pandemic. Delinquency rates on some categories of consumer debt have been increasing. For example, the rate of delinquency on auto loans hit 3.8% over the summer, the highest level since 2010.
Chopra Pushes for Expanded Deposit Insurance
CFPB Director Chopra is asking Congress to reconsider some type of deposit insurance reform, after the failure of a small Oklahoma bank looks likely to cause uninsured depositors to take some losses. When First National Bank of Lindsay failed in October, the FDIC communicated to depositors that it would make 50% of their uninsured funds available, pending the resolution process. Chopra contrasted this to the treatment of depositors when Silicon Valley Bank and Signature Bank failed last year. In those cases, the government invoked the systemic risk exception to fully cover all deposits, including those above the $250,000 cap. Director Chopra wrote in a statement, “In other words, big businesses putting their money in big banks enjoy free deposit insurance, and small businesses putting their money in small banks don't. This is fundamentally unfair.”
Morgan Stanley Invests $20Mn in NovoPayment
Miami-based NovoPayment has scored a $20Mn investment from Morgan Stanley Expansion Capital, the companies announced last week. NovoPayment offers API-delivered solutions for cash management, digital wallets, real-time payments, loans, deposit accounts, and virtual cards. The company operates across 15 markets in Latin America, the Caribbean, and the U.S. NovoPayment plans to use the fresh capital to continue scaling its business through commercial partnerships and product development.
Solvento Scores $12.5Mn Series A
Mexico-based Solvento announced it has raised a $12.5Mn Series A. Solvento offers a platform to facilitate and automate payments and invoice financing for truck drivers and third-party logistics providers. Solvento enables instant payouts to shippers, helping them to better manage their cash flow. The round was led by Cometa with participation from Quona Capital, Ironspring Ventures, Zenda Capital, and others. Solvento plans to use the new funding to continue growing its platform, including by developing more robust cross-border tools and capabilities to facilitate an expansion into the United States.
Goldman Evaluates Spinning Out Blockchain Unit
Goldman Sachs is evaluating spinning out its blockchain business unit into a stand-alone business. The Digital Asset Platform, known as GS DAP, was launched in 2022 and leverages smart contracts to digitize and manage assets across their lifecycle for institutional clients. The potential spinoff would facilitate an “industry-owned” distributed technology solution, the bank said in a statement, which would enable “a distributed ecosystem that allows participants to interoperate seamlessly, efficiently, and at scale.” Concurrent with announcing the planned spinoff, Goldman revealed electronic trading firm Tradeweb as DAP’s first strategic partner.
Google Pay Now Offers Afterpay BNPL
Google is now offering Afterpay’s BNPL capabilities via its Google Pay digital wallet, in a move that echoes archrival Apple’s abrupt shutdown of its own BNPL offering in favor of a platform strategy. Google is expected to begin offering support for Klarna BNPL sometime next year. Google Pay won’t support Afterpay at all merchants, however, with only “select merchants” support at launch, per the company’s statement.
Robinhood Acquires TradePMR in Deal Worth Up to $300Mn
Robinhood will acquire custodial and portfolio management platform TradePMR, the companies announced last week, in a cash-and-stock deal valued at up to $300Mn. Robinhood intends to build on TradePMR’s “open architecture” platform, Fusion, to offer a service where advisors and their clients can manage their assets directly within the Robinhood app. TradePMR comes with a key relationship that Robinhood intends to preserve and deepen: Wells Fargo Clearing Services, which provides lending, clearing, and execution services to the company. The deal is Robinhood’s latest, after the company spent $200Mn to acquire crypto exchange Bitstamp and an undisclosed amount on investment research platform Pluto Capital.
