Julien Eichinger - stock.adobe.c
Payments giant Visa is taking over Swedish open banking fintech Tink, bringing open banking capabilities to its European business and consumer customers.
Thousands of financial services firms in Europe use Tink to give customers access to open banking services, such as account aggregation and financial management tools, through its application programming interface (API). Visa said the combination of the capabilities from the two companies could help to accelerate the adoption of open banking in Europe.
“Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals,” said Al Kelly, CEO at Visa. “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.”
Following the acquisition Tink will retain its headquarters in Stockholm, its brand and its current management team.
Open banking services were made possible by the EU’s Payment Services Directive 2 regulation, which came into effect in 2018. PSD2 enables third parties to access the customer data held by banks via APIs, if customer consent is granted, and offer services using this information.
For example, a company, with consent, can take a payment directly from an account without the customer leaving its website. In the UK, banks were required to implement the Competition and Markets Authority’s (CMA’s) open banking regulations.
Figures from the UK’s Open Banking Implementation Entity (OBIE) said that more than four million open banking payments were made in the UK in 2020, compared with 320,000 in 2018, and nearly six billion API calls were made to servers in the UK, compared with just 66.8 million in 2018.
Tink originally offered its product directly to consumers with a personal finance app. It was an example of the use of open banking before open banking regulations existed. But, in 2012, Tink changed its business model to offer banks an API, which allowed them to build their own open banking capabilities. It won business with range of tier one banks as customers, including BNP Paribas Belgium, ABN Amro, and NatWest, as well as well as fintechs ranging from large companies such as Klarna to small startups .
Responding to the Visa takeover, fintech entrepreneur Matthias Kroener, who founded early challenger bank Fidor Bank in Germany, said: πCard companies are the winners from all that challenger bank/fintech development, very generally speaking. With Tink, Visa strengthens its infrastructural position and can grow deeper into the value chain of banking – and not cards only.”
Tinks’ CEO and co-founder, Daniel Kjellén, said that Visa will give the company a platform to accelerate its development and extend its reach.
“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,” he said.
Charlotte Hogg, CEO of Visa Europe, said the acquisition is a sign of Visa’s commitment to Europe: “In Tink, we have found a strong partner with which we can accelerate innovation in open banking for the benefit of our collective clients and the citizens of the UK and the EU, while investing in high-skill tech jobs on the continent.”
Read more about PSD2 and open banking
- The government’s Competition and Markets Authority has requested feedback on proposals to increase competition in the UK banking sector.
- The Competitions and Markets Authority opens up the banking apps market following an investigation into how to create greater competition in banking.
- With the EU’s Payment Service Directive (PSD2) going into effect in January 2018, banks have no time to waste in preparing for the changes it will bring.
- Open banking is a relatively new concept, having come into effect in Europe only in the last couple of years. So what is the state of play?