Visa agreed Thursday to pay 1.8 billion euros ($2.1 billion) for Swedish financial technology start-up Tink in a deal aimed at bolstering the payment giant’s digital ambitions.
The agreement comes after Visa’s attempt to acquire Plaid, an American competitor to Tink, was thwarted by US regulators. Plaid has subsequently gone it alone as an independent company, with a private market capitalization of $13.4 billion.
Plaid and Tink are both part of a new industry called opening banking, which requires lenders to give third-party companies access to valuable consumer banking data in exchange for consent. Because of new regulations, open banking has flourished in the United Kingdom and the European Union.
“Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals,” Visa’s CEO, Al Kelly, said in a statement.
“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.”
Tink was founded in 2012 by Swedish entrepreneurs Daniel Kjellén and Fredrik Hedberg as a financial management application, but it later turned to focus on delivering technology to other businesses.
The startup, which was launched in Stockholm in 2012 and employs around 400 people, has technology that connects to over 3,400 banks in Europe, reaching over 250 million bank customers.
Tink’s technology enables banks and fintech companies to collaborate with over 3,400 lenders to develop innovative financial solutions. The Stockholm-based firm was recently valued at 680 million euros on a private basis. PayPal, SEB, and ABN AMRO were among the investors who contributed more than $300 million.
“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,” Tink’s founders said on Thursday in a blog post.
“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,” they added.
The combination of Visa’s proven infrastructure and continuous investment in resilience, cybersecurity, and fraud prevention with Tink’s APIs, technology, and customer relationships is anticipated to boost open banking adoption in Europe by providing a secure, reliable platform for innovation.
As a result, consumers have more influence over their financial experiences, such as money management, financial data, and financial goals. At the same time, large and small businesses will have access to a broader and more customizable set of tools for operating digitally and securely, whether it’s reconciling bank statements and accounts or facilitating alternative funding.
The acquisition of Tink by Visa is the most recent in a string of consolidation initiatives in the vast payments business. Last year, the company attempted to buy Plaid but was forced to cancel the deal after the US Department of Justice moved to stop it on antitrust grounds.
Visa said the Tink deal is subject to regulatory clearances and other standard closing conditions, but it will be funded entirely with cash and will have no impact on the company’s stock buyback program or dividend policy.
Tink’s branding and management team will remain in place following the acquisition, according to Visa, and the company’s headquarters will remain in Stockholm.