European open banking platform Tink will be acquired by Visa Inc in a deal worth 1.8 billion euro ($2.2 billion), the payments giant said on Thursday.
It was just a few months ago that Visa backe3d away from a planned purchase of the European startup’s rival – the United States based Plaid.
The services offered by Tink, which was founded in 2012, allows banks and other financial companies to more easily share and access consumer financial data, said the Tink is headquartered in Sweden. The services of the firm is used by more than 3,400 banks and other institutions in addition to more than 250 million retail customers in Europe, Tink said.
In January, a planned $5.3 billion deal for the acquisition of US data sharing platform Plaid was terminated by Visa after a lawsuit was filed by the US government aimed to block the deal because of antitrust concerns.
According to the rules of open banking in the European Union, banks are mandated to allow access to customer data by registered third party providers to boost competition.
A level playing field for fintechs, such as Tink has been thus created by the rollout of the rules. Such startup companies offer technological support to third parties and banks for accessing of customer data.
The proiposed Tink acquisition could also face antitrust concerns from regulators just as it was in the case of the failed Plaid deal, said some financial technology experts.
“Europe is a very different open banking market to the USA,” said Simon Taylor, head of ventures and co-founder at fintech consultancy 11:FS. “But Tink is one of the largest players, and many of the concerns that led to the investigation into the Plaid-Visa deal may apply here.”
This deal comes at a time when Visa is aggressively seeking to diversify revenues beyond credit card payments – a market segment in which Visa is one of the dominant player. Increased pressure especially in Europe, from regulators is faced by card companies over concerns on fees charged.
Card companies have been facing increased pressure from regulators on fees, especially in Europe.
If the deal goes through and gets completed, it could also mark another success for Sweden’s financial technology startup sector where a number of large companies have been created in the last few years.
For example, the latest fundraising round earlier this month, the buy now pay later company Klarna managed achieve a market value of $46 billion.
In 2018, PayPal Holdings Inc had acquired the payments startup iZettle in a deal worth $2.2 billion.
“With Tink and iZettle, Sweden has now produced two of Europe’s largest ever fintech M&A exits,” said Josh Bell, general partner at Dawn Capital, a venture capital firm who backed both firms.
(Adapted from Investing.com)