With a nod to the tumult in the tech sector after the failure of Silicon Valley Bank, London-based Payhawk has announced the rollout of a line of emergency credit cards with zero-interest rates and 30-day payment terms.
Payhawk brings together credit cards, payments, expenses, and cash into a single, integrated experience.
The March 10 failure of Silicon Valley Bank, the lender of choice to some of the biggest tech firms in the world, has roiled the financial markets and is the largest bank to fail since the 2008 financial crisis, a situation Payhawk labeled as “financial chaos” in its news release. The governments in the United States and the United Kingdom moved quickly to calm accountholders, and in the UK, HSBC purchased Silicon Valley Bank for one British pound and pledged to protect accounts without government assistance.
The Need Payhawk Sees
Even so, Payhawk said, “there is greater fragility to traditional banking institutions thanks to the supersonic speed of information in a tech-enabled world.”
“Now that there is a real risk of cash crunch at businesses…we wanted to ensure that we can help those businesses given our strong position as a company in the space,” Payhawk Co-Founder and CEO Hristo Borisov said in the company’s release.
Payhawk deploys its solutions in more than 32 countries, including the United States and the United Kingdom, and has offices in London, Berlin, Barcelona, Paris, Amsterdam, Vilnius, Sofia, and New York.
The Play for Payhawk…and for Businesses That Need Help
For Payhawk, there is considerable upside to offering this product at a difficult time for some tech firms.
“It’s customer acquisition and building relationships,” said Ben Danner, a Senior Analyst, Credit and Commercial, for Javelin Strategy & Research. “They can eventually cross-sell into different products.”
Businesses inclined to take advantage of such an offer have their own considerations, Danner said, among them “controlling spending and managing cashflow” at a fraught moment.
SVB Tries to Get On Its Feet
On the U.S. side, SVB’s new CEO, Tim Mayopoulos, appointed when the federal government took control of the failed bank, had a half-hour videoconference Wednesday with the bank’s clientele of venture capitalists and startup businesses.
His message: Bring money back to the bank.
“There is no safer place in the U.S. banking system to put your deposits,” said Mayopoulos. CNBC, which attended the call, was the first to report on its contents.
Mayopoulos, 64, was appointed by the Federal Deposit Insurance Corp. He was formerly President and CEO of Fannie Mae, general counsel of Bank of America, and has deep banking experience. CNBC reported that he was intent on connecting with venture capital firms, which have been particularly and publicly dismayed over the bank’s failure.