The Tink acquisition will give Visa big leverage in expanding its footprint in the rapidly evolving open banking market of Europe. The entire acquisition deal will happen in cash.
On Thursday, June 24, payments giant Visa Inc (NYSE: V) announced the acquisition of Sweden-based FinTech firm Tink valued at 1.8 billion Euros. This will be a major step for Visa to expand its footprint in the fastly evolving financial technology market.
Using a single API, Tinks lets its customers get access to aggregated financial data. Besides, it uses smart financial services like account verification and risk insights while building its personal finance management tools. So far, Tink has expanded its services to millions of customers across Europe. Besides, it has also partnered with over 3400 banking institutions in the region.
Visa said that the Tink acquisition will help to accelerate the adoption of open banking systems in Europe. It will do this by combining Tink’s API technology with Visa’s proven security infrastructure offering cybersecurity and fraud prevention. This will thus offer consumers a unique financial experience to manage their financial data and financial goals. Speaking on this development, Al Kelly, CEO and Chairman of Visa, said:
“Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals. By bringing together Visa’s network of networks and Tink’s open banking capabilities we will deliver increased value to European consumers and businesses with tools to make their financial lives more simple, reliable and secure.”
Visa and Tink Deal: Acquisition of the Plaid Competitor after a Failed Deal
With the US regulators storming Visa’s previous attempt to buy Tink competitor Plaid, Visa set its eyes in the European market. Both Tink and Plaid compete with each other in the open banking market. Both these companies help lenders to provide third-party firms access to consumer banking data.
The open-banking market has been exploding across Europe in recent times. Tink, which started as a financial management app in 2012, started offering its technology solutions to businesses at a later stage. Using Tink’s APIs banks and FinTech firms can get access to banking data thereby creating new financial products. In a blog post on Thursday, the Tink founders noted:
“As we got to know Visa, it became clear that we share a common mission – to connect the financial world and accelerate the growth and adoption of digital financial services. Teaming up with Visa means we’ll now be able to move faster and reach further than ever before, and we know that Visa is the perfect partner for the next stage of our journey.”
Visa said that it has financed the entire deal with Tink in cash. It also assured investors that there will be no impact on its dividend policy and buyback program.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.