Barr To Step Down; X Money Closer to Reality; Employer.com’s Acquisitions

Fed can slow rate cuts. Employment market cools. Vice Chair Barr to step down. Employer.com acquires Bench, makes an offer for Level. Elite buys Tranch. Fiserv enhances offerings with Payfare acquisition. X Money moves closer to reality. TransUnion buys out stake in Monevo.

Join us on 1/23 at 1pm ET as Cross River leaders explore important trends and products, along with regulatory changes expected to arise from the new administration.

New here? Subscribe here to get our newsletter each Sunday. For even more updates, follow us on LinkedIn.

Fed Can Slow Pace of Rate Cuts, Fed Gov Cook Says

The Fed can be more patient with further rate cuts, Fed Governor Lisa Cook said at a conference in Ann Arbor, Michigan, last week. Cook pointed to stickier than hoped for inflation and a resilient job market in arguing that the Fed can be more cautious with making additional rate cuts. Current policy is ‘notably’ less restrictive after multiple rounds of cuts beginning last September, Cook said. Meanwhile, ADP data shows private payrolls increased by 122,000 in December, the smallest increase in four months. Unemployed white-collar professionals are having a more difficult time finding new jobs, with more than 1.6Mn workers on the hunt for six months or more. These and other data points suggest a gradual softening of the U.S. employment market.

Vice Chair for Supervision Barr to Step Down

If it was a game of chicken, Fed Vice Chair for Supervision Michael Barr blinked, though not without reason. Despite having about a year left on his term, Barr said he would resign from his position at the end of February. However, Barr will continue to serve in his role as a Fed governor, denying President-elect Trump the opportunity to simultaneously appoint a new person as a Fed governor and as Vice Chair for Supervision. Instead, Trump would need to nominate an existing Fed governor to the role, limiting his choices to Michelle Bowman or Christopher Waller. Barr’s decision to step down front runs a potential challenge to remove him, which, if successful, would have risked undermining the independence of the Federal Reserve.

Employer.com Acquires Bench, Makes an Offer for Level

Employer.com, a global payroll and employer-of-record solution, made offers to acquire not one but two failed fintechs in recent weeks. The more dramatic deal was Employer.com’s last-minute acquisition of small business accounting startup Bench, which came together after Bench had abruptly shut down and had already laid off most of its employees. After news of the acquisition broke, Employer.com scrambled to try to rehire the recently laid off employees. Adding to the intrigue, Bench’s former CEO and cofounder took to social media to criticize the company’s VC backers who, he said, pushed him out in favor of a “professional” CEO. Terms of the deal were not disclosed.

Less than a week later, Employer.com put forth an offer to acquire Level, a startup that sought to offer employers a more flexible way to provide employee benefits, like vision and dental coverage. Level had raised at least $30.8Mn in equity, including a $27Mn Series A announced in 2021. As of mid-last week, Level was reported to still be mulling over Employer.com’s acquisition offer.

Elite to Acquire Tranch

In other acquisition news, Elite, a financial management and business operations platform, announced it is acquiring Tranch, a B2B invoice automation startup focused on serving law firms and their clients. Tranch’s platform enables firms to streamline and automate invoicing and payment processing flows, thereby reducing manual work and accelerating cashflow. Tranch offers a variety of payment options, including real-time payments via FedNow and TCH RTP, as well as a “Pay Later” option, enabling clients to spread payments over time. Of the deal, Mark Dorman, CEO of Elite, said, “At Elite, our focus is on providing law firms the SaaS solutions they need to lead their business into the future with confidence, and help them gain operational efficiencies, optimize resource allocation and improve expense management.”

Fiserv Enhancing Offerings with Payfare Acquisition

Payments giant Fiserv is acquiring Canadian digital banking startup Payfare after a face-off for DoorDash’s business, according to Payments Dive. Payfare provides EWA services and had been managing DoorDash’s card issuing platform, until Fiserv poached the business. Losing the DoorDash account put Payfare in a “challenging” position, which Fiserv seemingly capitalized on. While terms of the acquisition weren’t disclosed, analysts estimate it was worth about $140Mn. The acquisition will enhance Fiserv’s embedded lending, banking, and card management capabilities, the company said in a press release.

X Money Closer to Reality

Elon Musk seems to be everywhere these days, including, soon, your wallet. X, formerly known as Twitter, claims to be on track to launch X Money sometime this year. The company has been diligently applying for state money transmission licenses, with 33 state licenses already in hand. Analysis of leaked software code shared on, where else, X suggests that the company could launch the feature in states where it has secured licenses sooner rather than later. Launching some kind of digital wallet and payments offering could be a first step towards Musk’s attempt to transform the social media site into an “everything app” a la China’s WeChat.

TransUnion Buys Out Monevo Stake from Quint Group

TransUnion is acquiring U.K. credit prequalification platform Monevo, the companies announced last week. TransUnion already held a 30% stake in the CreditKarma-like company and has agreed to buy out the remaining ownership stake from U.K.-based Quint Group Limited. Of the acquisition, President of TransUnion International Todd Skinner said, “We are committed to making trust possible in global commerce by ensuring consumers and organisations can transact with confidence. Prequalification, or eligibility, is an integral part of the consumer lending process. It drives financial inclusion and responsible lending by helping consumers find more suitable products in less time.”