In a move that Mastercard said will enhance its open banking products, the Purchase-based credit card company said on June 23 that it intends to buy Finicity for $825 million. The transaction expects to close by the end of the year.
“Open banking is a growing global trend and a strategically important space for us ,” Michael Miebach, president of Mastercard, said in a statement. “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.”
Mastercard”™s open banking services in Europe have connections to more than 1,800 financial institutions.
Mastercard said in a statement that Finicity”™s complementary technology would strengthen its own open banking platform.
“Open banking gives people and businesses more control over their financial data,” Mastercard stated. “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.”
“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,” said Steve Smith, chief executive officer and co-founder of Finicity, which is based in Salt Lake City. “This partnership with Mastercard helps us accelerate this mission globally.”
If performance targets are met, Finicity said its shareholders have the potential for an earn-out of up to an additional $160 million. Finicity”™s technology powers platforms such as Quicken Loans Rocket Mortgage and Experian Boost.
