The multinational financial services corporation announced Tuesday it had acquired Finicity, a Salt Lake City-based fintech. Visa made a similar move in January with the acquisition of Plaid, a similar fintech, for $5.3 billion. Finicity’s proprietary high-tech financial solutions will help bolster Mastercard’s account authentication and lending decision capabilities. This will also allow the world’s second-largest payments processor to offer more streamlined and secure services to customers as it continues its foray into open banking systems.
Open banking systems
A relatively new feature of the digital economy, open banking systems enable third-party developers such as Finicity to build customizable Application Programming Interfaces or APIs across several financial markets. Such ingenious APIs have the potential to help foster greater financial transparency for tech-savvy businesses and individuals. Financial exclusion concerns do exist, however, for low-income consumers who may not have the know-how to fully benefit from it.
With mobile technologies and the internet of things rapidly gaining steam, Mastercard initiated the open banking platform strategy last year in Europe where it currently serves 1,800 financial institutions. The acquisition of Finicity will give momentum to Mastercard’s localized view to approaching new markets and support the concept’s Source…