Visa has struck a €1.8bn deal to buy Swedish fintech Tink, less than six months after a previous attempt to buy its US rival Plaid was blocked by regulators.
Tink develops technology that allows third parties to connect to customer data from different financial institutions, allowing them to offer services such as account aggregation and payments that bypass traditional card networks like Visa’s.
Regulators have been trying to encourage services like those offered by Tink as a way to encourage more competition and choice in the European payments market, and in 2018 introduced “open banking” rules that forced banks to allow companies such as Tink to access their data.
Visa said the acquisition would encourage open banking, which has so far been held back by unreliable services and low levels of familiarity and trust among consumers.
Al Kelly, Visa chief executive and chair, said: “Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals. 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.”
The €1.8bn purchase price is a 165 per cent premium to the value given to Tink by investors including PayPal and BNP Paribas in a fundraising round last December, and reflects rapidly rising interest in open banking. Earlier this year, Plaid raised money at a valuation of $13.4bn, almost triple the price Visa agreed to pay for it in early 2020.
These earlier takeover plans were scuppered by regulators at the US Department of Justice, who accused Visa of trying to eliminate a potential future competitor, a charge it denied.
People close to Visa stressed that Tink operates a “different business model” from Plaid and that open banking regulations make the European market very different from the US, where Plaid is based. Visa stressed in the deal announcement that Tink is just one of “over 440 third party providers across Europe that provides open banking services”.
Charlotte Hogg, Visa Europe chief executive, said: “In Tink, we have found a strong partner with whom we can accelerate innovation in open banking for the benefit of our collective clients and the citizens of the UK and the EU.”
Visa said it would retain the Tink brand and its current management team and headquarters in Stockholm.
Daniel Kjellen and Fredrik Hedberg, Tink co-founders, said: “Partnering with Visa will allow us to further grow our organisation, products and services, to better serve our existing as well as future customers — while continuing to operate as an independent brand and build on the incredible strengths of Tink.”