Mastercard has bought the Salt Lake City-based fintech Finicity. With this move, the card issuer aims to strengthen its open banking platform and expand financial services through more real-time access to data.
This acquisition was made for $825 million, with an additional $160 million for existing Finicity shareholders. Finicity has various relationships with banks and other financial providers, and the company helps third-party platforms leverage financial credentials in a secure platform.
Mastercard president Michael Miebach sees open banking as a “growing global trend” so these investments are crucial for Mastercard’s growth. The deal should work for consumers as well as for businesses, says Mastercard. It is supposed to help streamline the credit decision process and providing an improved ACH and real-time payment experience.
“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,” says Miebach.
“Enabling people to access and control their data, while ensuring best practices to protect that data, will continue to drive tremendous innovation that increases financial literacy, inclusion and health,” Steve Smith, CEO and co-founder of Salt Lake City-based Finicity, said in the release. “This partnership with Mastercard helps us accelerate this mission globally.”
Finicity has about 500 employees globally. Since its 1999 inception, it has raised a known nearly $80 million in venture funding, according to Crunchbase data. In December 2016, the company raised $42 million in a Series B financing led by Experian.
This acquisition comes five months after Mastercard’s rival Visa announced it was acquiring fintech unicorn Plaid for $5.3 billion. Both acquisitions are examples of credit card giants recognizing the value of acquiring tech companies rather than just trying to build out the technology themselves.