Finicity provides financial data APIs, credit decisioning tools, and financial wellness solutions

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Mastercard to acquire US fintech compay Finicity. (Credit: Tumisu from Pixabay)

Mastercard has agreed to acquire Finicity, a US-based provider of real-time access to financial data and insights, for $825m, in a move to strengthen its existing capabilities in open banking.

Apart from the purchase price, Finicity’s existing shareholders stand to earn up to an additional $160m based on the fintech company achieving certain performance targets.

Finicity, which rolled out its first financial product in 2000, currently, provides financial data APIs, credit decisioning tools, and financial wellness solutions.

Finicity CEO and co-founder Steve Smith said: “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.”

According to Mastercard, the addition of the complementary technology and teams through the acquisition enables and protects a greater choice of financial services. Furthermore, the transaction is also expected to strengthen Mastercard’s long-standing partnerships with and commitment to financial institutions and fintechs across the world.

Mastercard claimed that it has been increasingly investing in open banking over several years, which includes last year’s launch of a set of open banking solutions in Europe.

The company said that the combination of its efforts with Finicity’s technology powering platforms like Quicken Loans Rocket Mortgage and Experian Boost can potentially shape the next wave of open banking services.

Mastercard president comments on the acquisition of Finicity

Mastercard president Michael Miebach said: “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.”

The deal is expected to be closed by the year-end based on receipt of regulatory approvals and meeting of other customary closing conditions.