Mastercard announced that it has entered into an agreement to acquire Finicity, a leading North American provider of real-time access to financial data and insights.
The purchase price is $825 million, and Finicity’s existing shareholders have the potential for an earn-out of up to an additional $160 million, if performance targets are met, the Company said in a press release.
“The addition of Finicity’s complementary technology and teams strengthens the existing Mastercard open banking platform to enable and safeguard a greater choice of financial services, reinforcing the company’s long-standing partnerships with and commitment to financial institutions and fintechs across the globe,” Mastercard said.
Open banking gives people and businesses more control over their financial data. This includes determining how and where third parties – such as fintechs or other banks – can access that information to provide new services like money management programs or initiate payments on their behalf.
Mastercard said that it has increasingly invested in this space over several years, including the 2019 launch of a set of comprehensive open banking solutions in Europe. The combination of these efforts with the Finicity technology powering platforms such as Quicken Loans Rocket Mortgage and Experian Boost has the potential to shape the next generation of open banking services.
“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. “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.”
“Since our founding, Nick Thomas and I have focused on developing industry-leading technology and building an organization that empowers consumers and organizations to better understand, manage and use their financial data to improve their financial lives,” said Steve Smith, chief executive officer and co-founder of Finicity. “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.”
“Bank of America is a strong believer in giving people control over their financial information and the ability to share it securely,” said Mark Monaco, head of Enterprise Payments at Bank of America. “We’ve worked with both Finicity and Mastercard, as well as industry groups such as Financial Data Exchange, to accelerate the adoption of the highest standards of privacy and security for data sharing, and to eliminate the retention and storage of individuals’ financial details by third parties. We look forward to continuing our work with Finicity and Mastercard to further improve the customer experience.”
“Finicity has been a strong partner of Rocket Mortgage during the mortgage industry’s tech revolution. Fast, easy access to consumer-permissioned data is critical to lenders who are making well-informed mortgage real time decisions. We are happy for the Finicity team in joining Mastercard and look forward to a continued partnership,” said Scott Elkins, senior vice president of Investments at Rocket Mortgage.
“Brex’s innovative offering uses Finicity’s connectivity, giving us access to the best quality business-permissioned data to power our platform,” said Henrique Dubugras, chief executive officer, Brex. “The combination of Finicity’s capabilities with Mastercard’s products and services will enable us to create innovative solutions to enhance our Brex offerings.”
“We are pleased to see the combination of Finicity and Mastercard,” said Craig Boundy, chief executive officer of Experian North America. “We look forward to collaborating with them in our ongoing mission to help consumers.”
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