The acquisition of a company whose strength is in the mortgage industry might seem curious, but Mastercard is recognizing the evolution of buyers towards online platforms. Worth noting: “Over the past three months, as we’ve seen what’s happened with the pandemic and COVID, we’ve seen the world go more digital and there’s greater demand for capabilities that don’t require face-to-face interaction,” said Mastercard MA CFO Sachin Mehra.
Mastercard scoops up open-banking company Finicity amid big digital push
Mastercard Inc. is making a bigger bet on open banking as consumers look to use their banking and financial credentials with more online services. The company announced Tuesday that it plans to acquire Finicity, an open-banking company, for $825 million, with for an additional $160 million earn out for existing Finicity shareholders. Finicity has relationships with banks and other financial providers, and the company helps third-party platforms leverage financial credentials in a secure platform. Finicity is part of the open-banking movement, which Mastercard MA, Chief Financial Officer Sachin Mehra called “clearly a strategically important area for Mastercard.” More people are linking up with digital services like money management platforms or online lending applications, and those services need to safely tap into users’ bank financial credentials in order to safely use money, a practice that relies on open-banking technology.