Retail Sales Data Send FinTech IPO Index Down

Shares, including those of the FinTech IPO index, fell as retail sales data disappointed.

As PYMNTS reported on Thursday (December 15), November retail sales fell 0.6% from October levels.

Holiday spending has proved no panacea here, and other macro data points helped underline the fact that inflation is not slowing down. Central banks, including the Federal Reserve and the ECB, raised interest rates, with more increases likely on the horizon. The implication here is that the pressures that have been in place and the headwinds to transactions and payment volumes will only become more pronounced.

Warnings about consumption

And to that end, the FinTech IPO index dropped 3.5% over the past five sessions. Names that rely on consumer sentiment, propensity to spend, or financing that spending over time suffered the most.

There are other data points that consumers find more difficult to juggle with the challenges of managing day-to-day financial life. As PYMNTS/Lending Club data showed Thursday, 57% of individuals living paycheck to paycheck say inflation has reduced their ability to meet long-term financial goals. These goals include saving for retirement and saving money.

Catapult sank 30.7% through the same five-day time frame.

Paysafe followed close behind, losing 28.6% over the past five sessions. This week, the payments platform saw a reverse 12-for-1 stock split.

Separately, the company said this week that its cash arm, viafintech, has started a new partnership with bank ING Germany. As for the mechanics of the deal, and according to a press release, more than nine million ING customers can make cash deposits or withdrawals from their current account at participating retailers in that country.

Affirm lost 10.7% from the end of last week, and Bank of America downgraded the buy now, pay later (BNPL) company’s stock from a “buy” rating to a “neutral” rating. The price target is now $13, where it had been $32, as noted by ETF Daily News.

Walmart plans to offer customers a BNPL option through its (Walmart-backed) FinTech venture ONE as soon as 2023. The installment payment option will join checking accounts, savings accounts and debit cards already offered by ONE. Walmart already uses Affirm to offer BNPL to its consumers; it was unclear what impact the new BNPL plans might have on the relationship.

Blend went up 28.1% after bucking the downtrend. The share price gains came during a week in which Blend Labs co-founder and chairman Nima Ghamsari said in a blog post that he has sold some of his shares in the company. The sales, he said in the post, were carried out to reduce the outstanding amount of a personal loan that was in turn secured by the manager’s stock holdings.

“In light of the decline in Blend’s stock price, I have sold some of my holdings in Blend stock and used the proceeds to reduce the amount outstanding under the loan, as required by the loan documentation,” he wrote.

How consumers pay online with stored credentials
Convenience prompts some consumers to store their payment information with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. consumers to analyze the consumer dilemma and reveal how merchants can win over holdouts.