Payment services firm Mastercard agreed yesterday to buy US-based financial data provider Finicity in an $825m transaction that will enable credit scoring service Experian to exit.
Finicity’s core business involves a digital budgeting platform that provides data to help users manage their finances more effectively, but it has added financial wellness tools and application programming interfaces (APIs) that enable business to build their own financial data apps.
The technology powers Experian Boost, a system that allows customers to connect utility bill payments to their online bank accounts in order to enhance their credit scores. Mastercard will integrate it into its open banking offering.
The company’s shareholders will have the chance to potentially get up to $160m in earn-outs depending on its performance post-acquisition.
Experian led Finicity’s $42m series B round 2016, which included unnamed existing backers, before it added $29m from undisclosed investors in July 2018 according to a regulatory filing.
Mastercard president Michael Miebach said: “Finicity has a proven business, built on partnerships with thousands of banks and fintechs, similar to us. Finicity also shares our commitment to consumer-centric data practices, ensuring consumers have a say in how and where their information should be used.
“It is through the use of next generation open banking APIs and clear consumer approvals that this financial information can deliver streamlined loan and mortgage processes, rapid account-based payment initiation and personal financial management solutions.”
