Mastercard announces acquisition of Finicity
Acquisition of Finicity helps Mastercard as it advances its open banking services
According to Mastercard, Finicity's existing shareholders could also earn an additional $160 million if performance targets are met. The acquisition of Finicity will help Mastercard as it advances its open banking services.
Finicity will help Mastercard as it strengthens its open banking services by allowing its customers to determine how and where fintechs or banks can access information to provide money-management services or initiate payments on their behalf.
In the past, Finicity has partnered with major financial institutions like Wells Fargo, Fidelity Investments, Capital One and JPMorgan Chase.
Once the acquisition is finalized, the combination of Mastercard’s existing technology with Finicity’s new analytics platforms will also help streamline the credit-decision process for consumers and small businesses. The integration of Finicity’s account owner verification tools to Mastercard’s New Payment Platform capabilities is expected to deliver an improved ACH and real-time payment experience as well.
“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.
Steve Smith, CEO and co-founder of Finicity added: “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.”
Mastercard has invested in the open banking space for many years and, in 2019, launched comprehensive open banking solutions across Europe. The combination of these efforts, along with Finicity powering platforms like Quicken Loans Rocket Mortgage and Experian Boost, has the potential to “shape the next generation of open banking services,” says Mastercard.
Mastercard anticipates closing the deal with Finicity by year’s end and doesn’t expect the acquisition to dilute its business for more than 24 months.
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