Visa Inc. has announced today that it will pay $2.2 billion (1.8 Euros) to acquire Swedish fintech startup Tink. This announcement comes few months after it bailed on its plans to acquire Plaid, one of the startup’s rivals based in the U.S.
Tink’s open banking platform provides an enabling environment for banks and other financial establishments to share and have access to consumer financial data conveniently. Tink’s platform, therefore, allows clients to connect to categorized financial data from the plethora of European banks and financial institutions.
The startup was founded in 2012 and has its headquarters in Sweden. The platform is used by more than 3,400 banks and financial institutions, as well as more than 250 million customers in Europe.
Visa would have acquired US-based Plaid for $5.3 billion but pulled the brakes on the decision after a U.S. government lawsuit aimed at blocking the deal on antitrust grounds.
Platforms like Tink thrive on the European Union rules on open banking that require banks to allow access to customer data by registered third-party providers to boost healthy competition.
Although these rules are providing an enabling environment for fintech platforms, some fintech experts believe that the Visa-Tink acquisition could be plagued by anti-trust concerns that made Visa rescind its decision to acquire Plaid.
Simon Taylor, Head of Ventures and Co-founder at fintech consultancy 11:FS talking about the Visa-Tink deal said “Europe is a very different open banking market to the USA, 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”.
Visa’s plan to acquire Tink is part of the company’s effort at diversifying its business and expanding its revenue sources beyond credit card payments – where it is solidly grounded. Recently, card companies like Visa have been facing pressure from European regulators on fees, this may be the reason why Visa is diversifying its business.
The Visa-Tink deal would be another milestone for Sweden’s fintech startup sector when completed. Many large companies have come out from Sweden over the years.
“With Tink and iZettle, Sweden has now produced two of Europe’s largest-ever fintech M&A exits,” Josh Bell of Dawn Capital, a venture capital firm said.