Klarna’s and Affirm have a very good week

Welcome back to The exchange, where we take a look at the hottest fintech news of the past week. If you want to get The Interchange straight to your inbox every Sunday, head over here to sign! Due to the US holiday, this is an abridged version.

Buy now, pay later refund

Both Klarna and Affirm – best known for their buy-now, pay-later businesses – revealed their quarterly results this week. And they didn’t disappoint.

Affirm reported that its first-quarter tax revenue rose 37% year-over-year to $497 million as gross merchandise volume rose 28% to $5.6 billion over the same period. And his stock arrived big boost As a result, it climbed as high as $27.16 on November 9. It lost some of those gains on Nov. 10, however, and was trading just above $22 that afternoon.

Meanwhile, Klarna reported revenue of 6 billion kroner ($549.9 million), up about 30% from 4.6 billion kroner ($421.6 million) in the third quarter of 2022. The company also reported an operating result 130 million kroner ($11.9 million), a huge improvement on 2.12 billion kroner ($192.6 million) loss a year ago. (All currency conversions use current SEK-USD rates.)

Both companies reported fewer late payments, meaning they lost less money from people who didn’t make payments. It’s good news for both companies and the space itself.

Speaking of Klarna, Alex and I teamed up to report on Klarna’s confirmation that it was moving towards an initial public offering. We moved on to what happens next and what could happen if IPOs are successful methods of raising capital again. Read more.

Weekly News

Journalist Annie Njanja has been keeping up with Flutterwave for over a year now since the African fintech company was accused by the Kenyan government of allegedly being involved in money laundering and fraud. This week, we received word that the company is now out of business after a court ruled that the country’s Asset Recovery Agency could drop its case against Flutterwave. Annie breaks it all down for you.

Mary Ann and Alex Wilhelm dedicated some Equity time to discuss the encouraging signs they were seeing in the fintech industry. They touched on some mega-tours, which we haven’t seen in a while. The pair also discussed Klarna’s solid third quarter results, which we spotted Simon Taylor’s view in X.

And now speaking of earnings, Klarna and Affirm weren’t the only ones with good news in the third quarter:

Dave’s net loss for the third quarter improved 47% quarter over quarter, while monthly trading members increased 6% to 1.9 million.
Flywire’s third-quarter revenue rose 29.5% year-over-year, with CEO Mike Massaro saying in a statement that the company “delivered our highest quarter of revenue and adjusted EBITDA ever.”
Payoneer reported record revenue of $208 million for the quarter and saw a 5% year-over-year increase in active ideal customer profiles.
At Robinhood, the investment firm reported total net revenue rose 29% year over year to $467 million as customer subscriptions grew to more than 1.3 million, with 100,000 added in the third quarter alone.

Meanwhile, good credit isn’t easy, which is why some fintech companies have focused on preparing kids and teens to succeed in this area. For example, in August, Greenlight launched the Greenlight Family Cash Mastercard. Now Step has one. CEO CJ MacDonald he tweeted Late last week, the company launched Step Black, a rewards card for Gen Z that will build credit without debt. By email, MacDonald said the card is the “world’s first secure Visa Signature rewards card” and has amassed a waiting list of more than 100,000 in the past two months. It is a 17 gram metal card with features like no minimum credit limit, $500 in annual benefits and up to 8x cashback. You may recall that Step announced in May a 5% interest rate on its savings account, and Step Black holders will also receive that interest rate up to $1 million with FDIC insurance. — Christine

Other items we read:

CFPB Proposes Oversight of Big Tech Digital Wallets

Banks are looking to fintechs to fend off the threat from Big Tech

Arc debuts international vault

Visa Launches Global AI Consulting Practice Focused on Manufacturing Systems

Belvo introduces bank debit service for Mexican businesses

Bluevine launches high yield rate for SMEs

PayByPhone was acquired by Fleetcorand was acquired by Volkswagen in 2016.