Here’s why Visa spent $2B to acquire a European open banking platform

Visa Inc. (NYSE: V) has entered a definitive agreement to acquire a European-based open banking platform called Tink. The platform enables fintech, merchants, and financial institutions to create customized financial management products, services, and tools for European businesses and customers depending on their financial data. Visa will pay $2 billion (£1.44) billion in retention incentives and cash to buy Tink.

Tink’s customers may access consolidated financial data, utilize intelligent financial services like account verification and risk insights, and develop personal finance management applications via a unified API. Currently, the open banking platform works with over 3,400 financial institutions and banks across Europe with millions of customers.

Visa wants to accelerate open banking growth

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To ensure a reliable, secure innovation platform, Visa will combine its continued investment in resilience and proven infrastructure, fraud detection, and cybersecurity with Tink’s APIs, tech, and customer relationships to help accelerate open banking adoption in Europe. Therefore, customers will have more influence over their financial needs, such as financial data, money management, and financial goals.

Equally, small and large businesses will have access to various customizable sets of tools for operating digitally and securely. This can be either in reconciling accounts and bank statements or facilitating alternative funding.

Visa Chairman and CEO Al Kelly 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.

Tink can grow faster under Visa

Commenting on the acquisition, Visa Europe CEO Charlotte Hogg stated that the purchase demonstrates the company’s commitment to Europe. She said that they identified a vital partner in Tink to expand innovation in open banking to benefit combined clients in the EU and the UK.

Tink Co-founder and CEO Daniel Kjellen said the company spent 10 years working to build a “leading open banking platform in Europe.” But after a decade of operating as an independent company, Tink will be better suited to operate under the Visa umbrella. Kjellen said:

We have built something incredible and at the same time we have only scratched the surface. Joining Visa, we will be able to move faster and reach further than ever before. Visa is the perfect partner for the next stage of Tink’s journey