Mastercard Inc. has signed a deal to buy Finicity, the Salt Lake City, Utah, provider of real-time access to financial data, for $825 million, Mastercard announced on Tuesday (June 23).
Finicity shareholders have an opportunity for an earn-out of up to an additional $160 million if performance targets are met, the announcement noted.
Mastercard said the addition of Finicity’s technology and its 500 employees worldwide will strengthen its open banking platform to allow and safeguard more financial services choices.
Open banking gives people and businesses more control over their financial data, Mastercard said. It provides third-party financial service providers access to consumer banking, transaction and other financial data from financial institutions through the use of application programming interfaces (APIs).
This includes determining how and where FinTechs or other banks can access that information to provide new services such as money management programs or initiate payments.
“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 Mastercard President Michael Miebach in a statement. “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.”
Mastercard said it has invested in this space over several years, including the 2019 launch of a set of comprehensive open banking solutions in Europe.
“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. “This partnership with Mastercard helps us accelerate this mission globally.”
The transaction, which is anticipated to close by year’s end, is subject to regulatory review and other customary closing conditions.
In an interview with PYMNTS earlier this month, Mark Barnett, president of Mastercard Europe, said open banking needs to “solve a few of the problems that we solved in the cards world before it is going to become useful for payments ... that’s what Mastercard is trying to do with a series of products.