Visa is reportedly in the market for Tink, the Swedish FinTech firm that is remarkably similar to Plaid – which Visa tried to buy already. In the US, the Justice Department opted to deny Visa the opportunity to buy Plaid.
Now, Visa is working to buy a company that does almost the same thing in the European market.
The price that Visa is willing to pay for Tink is high.
At €1.8 billion or around $2.1 billion, Visa will be paying 60x Tink’s annual recurring revenue from December. The reason why Visa is so motivated to make these kinds of acquisitions may have something to do with the business model that both Tink and Plaid have developed.
Instead of having to use a banking app – a person can use Tink to see their bank account balance, and then make transfers.
While this isn’t exactly what Visa does, it is pretty close, and has the ability to cut Visa out of the equation – and remove a large part of Visa’s revenue model from existence.
Al Kelly, the CEO of Visa, commented via a statement,
“Visas do everything they can to drive innovation and empower consumers to support Europe’s open banking goals. I promise to do it…By integrating Visa’s network with Tink’s open banking capabilities, we will provide European consumers and businesses with tools to make their financial lives simpler, more reliable and more secure, and add value. “
Tink’s business model may or may not be compatible with Kelly’s idea to make European banking customers’ lives easier – but it is clear that Visa is looking for ways to avoid dealing with FinTech innovations that may endanger its revenue.
Or – Visa just may see value in these FinTech platforms. The most recent valuation of Plaid by investors was $13.4 billion – almost 3x what Visa offered for the company.