Forbes - USA (2020-03)

THE FORBES FINTECH 50

Money Moves 2020

OWN UP TO YOUR CRYPTO TRADING HABIT

The new Schedule 1 of the IRS’ 1040 form asks wheth-

er you had any transactions in virtual currencies last

year, so forgetting to report sales is no longer an

option for people who want to avoid jail. But being

honest may in fact save you money: As with other

kinds of property, capital-gains tax on a crypto-

currency investment is due only when you sell. Sell-

ing just your losing positions generates capital loss-

es that can be put to use absorbing gains elsewhere

(such as from stocks and bonds). Crypto, moreover,

is exempt from the wash-sale rule that limits capi-

tal loss deductions for securities positions that are

quickly reestablished. —W.B.

FORBES.COM MARCH 20 20

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PAYONEER

Ì

NEW YORK CITY

PAYMENTS

Enables third-party sellers

and hosts on marketplaces like

Amazon, Walmart.com and

Airbnb to accept payments in

foreign currencies. Has start-

ed lending to Amazon and

Walmart sellers.

FUNDING: $270 million; latest

valuation of $1 billion^1

BONA FIDES: Four million

customers in 150 countries;

net profit margins north of 5%

FOUNDER & PRESIDENT: Yuval

Tal, 54 CEO: Scott Galit, 49

PLAID

SAN FRANCISCO

PAYMENTS

Making its fifth—and, assuming

its pending acquisition by Visa

goes through, last—appearance

on this list, Plaid connects pay-

ment apps like Square Cash

and personal-finance apps like

Acorns to users’ bank accounts

to transfer and track funds.

FUNDING: $310 million; Visa

agreed to pay $5.3 billion

BONA FIDES: 2,600 customers,

including Venmo, Robinhood

and Coinbase

COFOUNDERS: CEO Zach Perret,

32, and former CTO William

Hockey, 30

PLASTIQ

Ì

SAN FRANCISCO

PAYMENTS

For a 2.5% fee, lets small busi-

nesses use a credit card to pay

expenses (e.g., rent) for which

cards usually aren’t accepted.

Typical clients are restaurants,

doctors’ offices and construc-

tion firms.

FUNDING: $140 million;

latest valuation of $700

to $800 million

BONA FIDES: More than 50,000

customers; processing nearly

$4 billion in transactions a year

COFOUNDER AND CEO: Eliot

Buchanan, 30, started Plastiq

after his attempt to pay his

Harvard tuition with a credit

card was rejected

PROPEL

Ì

NEW YORK CITY

PERSONAL FINANCE

Its Fresh EBT mobile app al-

lows food-stamp recipients to

check balances, clip store cou-

pons and search job listings.

FUNDING: $18 million; latest

valuation of $55 million^1

BONA FIDES: Users doubled to

2 million in 2019

FOUNDER & CEO:

Jimmy Chen, 32

RIPPLE

SAN FRANCISCO

BLOCKCHAIN & BITCOIN

Its blockchain-based global

settlements network is used

by some 300 institutions.

It also lets companies make

payments in XRP, the crypto

created by its founders.

FUNDING: $293 million; latest

valuation of $10 billion

BONA FIDES: Still holds $12 billion

of XRP in escrow and has used

XRP sales to fund expansion

COFOUNDERS: Chris Larsen, 59;

Jed McCaleb, 45; Arthur Britto

CEO: Brad Garlinghouse, 49

ROOFSTOCK

OAKLAND, CALIFORNIA

REAL ESTATE

Digital real estate marketplace

enables investors to purchase

single-family rental properties

in 25 states.

FUNDING: $133 million; latest

valuation of $550 million

BONA FIDES: Has sold $2 billion

of real estate

COFOUNDER AND CEO:

Gary Beasley, 54

layer atop it for transactions, much the way a

quiescent base of vault currency and Federal Re-

serve deposits supports a torrent of checks and

electronic payments in the banking system. The

other is to create new digital currencies built

with transaction speed in mind. Among the ones

Coinbase supports are litecoin and bitcoin cash.

In December, Coinbase got a first-of-its-kind

authorization from Visa to issue debit cards that

allow holders to make purchases at the 46 mil-

lion locations (including ATMs) that accept Visa,

and have the money drawn from a Coinbase ac-

count holding cryptocurrencies. Initially, these

debit cards will be available to residents of 29

countries, but not the U.S. Still, Coinbase could

eventually develop its Visa authorization into yet

another business line: issuing credit cards on be-

half of other crypto exchanges.

Banks, meanwhile, aren’t missing the oppor-

tunity to redesign payment networks using old-

fashioned dollars. Zelle, an instant-payment sys-

tem run by a consortium of big banks, ran $187

billion of traffic last year, putting it well ahead of

PayPal’s Venmo. Zelle is mostly aimed at retail

clients doing things like splitting dinner tabs, but

has handled transactions as large as $3.2 million.

No question, disruptive technology is coming

to the banking system, and Coinbase will be a

part of it. It is the only outfit to appear on both

the Forbes Fintech 50 and Blockchain 50 lists.

But Armstrong is going to have plenty of com-

petition, starting with central banks, which are

plotting their own digital currencies. Facebook

hasn’t given up on Libra, which is intended to be

a globally accessible digital currency backed by

assets like dollars and euros.

Let a thousand flowers bloom, says Arm-

strong. “When I started Coinbase, most people

thought [blockchain] was crazy. Governments

and the old guard, the blue chips, are now in-

vesting in this technology. So let’s just say that’s a

very good thing.”

JIMMY CHEN

ÌNEW^ TO^ LIST

(^1) According to PitchBook