Stripe’s payments APIs: The first 10 years; Buy Now Pay Later vs Save Now Buy Later; Nu Bank Second Quarter 2024 Financial Results;

In this edition, we delve into Mastercard’s strong Q2 2024 financial performance, Stripe’s decade-long evolution of its payments APIs, and Nu Bank’s impressive customer and revenue growth

Insights & Reports:

1️⃣ Mastercard 2Q 2024 Financial Results

2️⃣ Stripe’s payments APIs: The first 10 years

3️⃣ Startup Pricing Journey - Pricing Discovery Archetypes

4️⃣ Nu Bank Second Quarter 2024 Financial Results

5️⃣ Buy Now Pay Later vs Save Now Buy Later

6️⃣ Fintech M&A Review: Middle-Market Valuation Analysis

7️⃣ Commercialising Open Finance - A three-step action plan for financial institutions

8️⃣ PayPal Expands Strategic Partnership with Adyen to offer Fastlane in the U.S.

9️⃣ Revolut secures $45bn valuation in share sale by employees

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TL;DR:

Starting with Mastercard’s Q2 2024 financial results, the company reported a robust performance with net income reaching $3.3 billion and net revenue increasing by 11% to $7 billion. This growth was fueled by a 9% rise in gross dollar volume and a 17% increase in cross-border transactions, underscoring Mastercard’s expanding payment network and strong demand for its value-added services, particularly in fraud and security solutions. Despite the positive results, Mastercard faced challenges, including a 12% rise in operating expenses and unfavorable other income due to interest expenses.

We also take a deep dive into Stripe’s decade-long journey of refining its payments APIs, which serves as a masterclass in how to build and maintain API products. From supporting card payments in the U.S. to launching the unified PaymentIntents API, Stripe’s evolution highlights the immense behind-the-scenes work required to create seamless developer experiences. This includes meticulous documentation, continuous updates, and innovations like the Stripe CLI and redesigned dashboard, which have significantly enhanced the developer integration process.

For fintech startups, understanding the four pricing discovery archetypes—Mouse, Elephant, Gnome, and Godzilla—could be a game changer. Each archetype represents a different market and pricing strategy, from the fast-moving, product-led Mouse to the collaborative and iterative approach of the Godzilla. These archetypes offer a framework for startups to navigate the complexities of pricing in varied market environments, helping them optimize their go-to-market strategies.

Nu Bank’s Q2 2024 results are another highlight, with the company adding 5.2 million customers, bringing its total to 104.5 million globally—a 25% year-over-year increase. Nu Bank’s impressive growth is matched by its financial performance, with net income surging to $487 million and revenue climbing 65% year-over-year to a record $2.8 billion. The bank continues to demonstrate strong operating leverage, with its cost-to-serve remaining low and efficiency ratios improving, positioning it as one of the most efficient financial services companies globally.

We also delve into the growing competition between Buy Now, Pay Later (BNPL) and Save Now, Buy Later (SNBL) models. BNPL has become a popular option for consumers, offering interest-free installment payments at checkout, while SNBL is emerging as a flexible alternative, allowing consumers to save towards future purchases with potential rewards and discounts. The business models of both options are evolving, reflecting broader shifts in consumer behavior and financial services.

In the M&A space, there’s been a noticeable slowdown in fintech private equity (PE) buyouts, with only 12 deals in Q2, a sharp decline from the previous quarter. Despite this, the fintech sector remains attractive for PE, particularly in payments and software, as evidenced by large deals like Nuvei’s $6.2 billion acquisition. Corporate acquisitions, meanwhile, remain subdued, with 26 deals in Q2, indicating that a full recovery in M&A activity may still be a couple of years away.

Finally, our curated news section covers PayPal’s expansion of its strategic partnership with Adyen to roll out Fastlane in the U.S., aimed at enhancing checkout experiences for enterprise customers. Revolut’s recent share sale valued the company at $45 billion, solidifying its position as Europe’s most valuable startup amidst a broader fintech downturn. Additionally, major cryptocurrency exchanges like Coinbase and KuCoin are seeking to expand into Turkey, reflecting the country’s growing appeal as a crypto hub.