FinTech: Mastercard Acquires Finicity for $825M
Mastercard snaps up Finicity, a data aggregator and insights platform, to enhance open banking.
Global payments processor and cards provider Mastercard (NYSE: MA) will pay $825 million to acquire Finicity, a fintech startup specializing in real-time data aggregation and provider of insights. If certain targets are met, Mastercard will pay an additional amount of $160 million. (KSL.com)
The purchase gives Mastercard technology that will help banks make faster credit decisions. It will also improve account verification processes using Finicity’s platform. It allows access to financial data for businesses and individuals.
The transaction reinforces Mastercard’s strategy to diversify out from traditional card payments and into the fintech domain.
In December, it acquired RiskRecon, a provider of artificial intelligence and data analytics solutions to support companies in protecting their cyber systems and infrastructure.
Prior to that, in October, Mastercard bought up customer data and loyalty platform SessionM, to enhance its ability to help brands around the world deliver personalized, real-time offers and comprehensive campaign measurement based on data-driven insights.
Finicity acquisition rationale
Mastercard said Finicity had a proven business built on partnerships with thousands of banks and fintechs. Besides, the Finicity technology powers platforms such as Quicken Loans Rocket Mortgage and Experian Boost.
Mastercard has made a significant thrust into open banking in recent years. In 2019, it launched a set of comprehensive open banking solutions in Europe. Open banking allows customers greater control over their financial data, particularly through the use of third party apps such as money management and for payments.
“Open banking is a growing global trend and a strategically important space for us. With the addition of Finicity, we expect to not only advance our open banking strategy, but enhance how we support and accelerate today’s digital economy across several markets,” said Michael Miebach, president of Mastercard, in a statement.
Mastercard’s open banking solutions can now expand into North America, leveraging Finicity’s technology and employees. Mastercard open banking services in Europe already connect to more than 1,800 financial institutions.
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