Pandemic increases activity for fintech companies

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With everyone stuck at home, any business that aims to replace brick and mortar activity with electronic transactions has a change to gobble up new busness.

That’s certainly the case with the fintech business area, as more people look to manage money electronically and avoid going to the bank. And we’re seeing more activity in that area as companies like Paypal and Venmo see a surge in new sign-ups.

  

Expect more M&A activity in the fintech space

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Deal activity is picking up in the fintech space as smaller startups that had great promise are being scooped up by the big boys. This M&A activity is expected to accelerate as the market starts to feel the impact of the Coronavirus. We will see the big players such as Paypal, the banks, Visa and Mastercard will be leading the way:

A surge in deals began just as the contagion was spreading. In January Visa announced it would pay $5.3 billion to purchase San Francisco’s Plaid, a tech platform connecting bank accounts to apps, and in February Intuit said it would pay $7.1 billion for Credit Karma. The coronavirus pandemic—and the business disruptions it is causing—will quicken the pace of transactions over the next year. Already, Motif, a 10-year old stock investing fintech backed by Goldman Sachs and JPMorgan that was once valued at $440 million, announced that it would shutter and sell its tech and intellectual property to Charles Schwab. Some like Motif and On Deck will end up in shotgun weddings, but others will find happy marriages of convenience.

Let’s see how this plays out.

  

Adobe pisses off more customers with Photoshop CC subscription mandate

If you want to use Photoshop CC, you have to purchase a monthly or yearly subscription. The days of the perpetual license are ending at Adobe, and that has left many customers furious, as these letters to the NYT reviewer make clear.

I have mixed feelings on this. I don’t have a huge problem with Adobe’s strategy, but I think they’re pricing it too high. The same goes for Dreamweaver. David Pogue points out that GIMP is a free competitor to Photoshop, and while Adobe will make out big in the short run, perhaps by pricing it too high they risk losing serious market share over time.

We’ll see how it plays out.

  

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