Mastercard to Acquire Finicity to Advance Open Banking Strategy

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Finicity | Release | Jun 23, 2020

Finicity - Mastercard to Acquire Finicity to Advance Open Banking Strategy

Strengthens existing open banking capabilities with Finicity’s proven technology and talent

Enhances collaboration and co-creation efforts with fintechs and financial institutions

Furthers commitment to consumer-centric data protection and practices

PURCHASE, N.Y. – June 23, 2020 – Mastercard (NYSE: MA) today announced 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 US$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 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.

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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 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.”

 

Strategic Rationale 

Advances Mastercard as a Strong Open Banking Partner for Fintechs, Financial Institutions. Finicity’s technology and dedicated employees will enhance Mastercard’s existing open banking solutions by enabling them to expand in North America and other key geographies. Today, Mastercard open banking services in Europe feature connections to more than 1,800 financial institutions. With a direct connection to the North American banking, lending and wealth management ecosystem, Mastercard will extend Finicity’s reach to be a one-stop partner for any consumer, bank, merchant, fintech or government’s data, payment and open banking needs.

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Strengthens Capabilities and Offerings to Consumers and Businesses. Following the completion of the transaction, Mastercard’s existing technology and expertise combined with Finicity’s new analytics platforms, will help streamline the credit decisioning process for consumers and small businesses. Additionally, the integration of Finicity’s account owner verification tools to Mastercard’s New Payment Platform capabilities will deliver an improved ACH and real-time payments experience to consumers, merchants and businesses.

Enhances Commitment to Responsible Data Practices. Finicity shares Mastercard’s commitment to safe and secure data practices centered around the individual. Finicity’s co-founders have played a critical role in the advancing the discussion of best practices across multiple industries. Finicity has a strong commitment to deliver best-in-class data management practices by partnering with banks and their customers to ensure secure connectivity is established.

“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.”

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NCFA Jan 2018 resize - Mastercard to Acquire Finicity to Advance Open Banking Strategy The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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