Mastercard to acquire open banking FinTech Finicity in $825m deal

North American FinTech Finicity is being sold to Mastercard in a $825m deal, with the payments giant planning to leverage the acquisition to further its push into open banking.

Finicity’s existing shareholders have the potential for an earn-out of up to an additional $160m if performance targets are met.

Mastercard will add both Finicity’s team and technology to its existing open banking platform, empowering it to provide a better service for its financial services and FinTech clients.

The acquisition is the latest in a long string of open banking investments Mastercard has done over the years, including the 2019 launch of a set of comprehensive open banking solutions in Europe.

“Open banking is a growing global trend and a strategically important space for us,” said Michael Miebach, president of Mastercard. “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. Finicity has a proven business, built on partnerships with thousands of banks and FinTechs, similar to us.

“Finicity also shares our commitment to consumer-centric data practices, ensuring consumers have a say in how and where their information should be used. It’s through the use of next generation open banking APIs and clear consumer approvals that this financial information can deliver streamlined loan and mortgage processes, rapid account-based payment initiation and personal financial management solutions.”

Steve Smith, CEO and co-founder of Finicity, said, “Since our founding, Nick Thomas and I have focused on developing industry-leading technology and building an organisation that empowers consumers and organisations to better understand, manage and use their financial data to improve their financial lives.

“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.  This partnership with Mastercard helps us accelerate this mission globally.”

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