Visa Enters Open Banking World With $2 Billion Fintech Acquisition

Visa agreed Thursday to spend $2 billion to acquire Tink, a Swedish fintech startup that provides digital services linking more than 3,400 banks and financial institutions in Europe.

The deal, however, is something of a consolation prize. It comes just six months after America’s largest credit card network abandoned a $5.3 billion acquisition of Plaid, Tink’s main U.S.-based rival, after the Justice Department raised an antitrust lawsuit.

Keys to the Data Wells

Tink specializes in the nascent “open banking” sector, where lenders give third-party firms access to consumer banking data — with user consent. Financial institutions can use Tink to aggregate data, initiate payments, and build digital tools to help customers manage various financial accounts all in one place.

Open banking has flourished in the EU and U.K. since 2018, when regulators forced banks to release their precious customer data to third parties, as long as customers gave the go-ahead. And a continent’s worth of data is quite the reward:

• The 3,400 banks and financial institutions connected to Tink have over 250 million customers in Europe.
• In December, the Stockholm-based startup was privately valued at $824 million. Visa’s $2.1 billion takeover announcement just seven months later suggests that may have been an understatement.

Card-Cutters: Visa’s urgent plunge into the fintech world comes as consumer-to-merchant payment solutions are blossoming. Startups like Alipay in Asia are helping more consumers pay merchants directly from their bank accounts, without the need for traditional cards.

Get ‘Em While They’re Hot: Other established financial players are rushing to get a foot in the fintech door, sparking a frenzy of deals. JPMorgan Chase last week agreed to buy Nutmeg Saving, a British digital wealth management startup, for $1 billion.