Mastercard stated Finicity’s existing shareholders have the potential for an earn-out of up to an additional $160 million ($233 million) on top of the purchase price, if performance targets are met.
The global brand has invested in open banking for a number of years, including its 2019 launch of a set of related solutions in Europe.
In Australia, open banking is set to launch on Wednesday, where it will oblige the major banks to share customer information related to credit and debit cards, deposit accounts and transaction accounts, where directed by a consumer.
Consumer data relating to mortgage and personal loans must be available to share from November.
Michael Miebach, president of Mastercard said open banking is a growing global trend and a “strategically important space” for the company.
“With the addition of Finicity, we expect to not only advance our open banking strategy, but enhance how we support and accelerate today’s digital economy across several markets,” Mr 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’s 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.”
The partnership with Mastercard will allow Finicity to expand its reach in North America and across other regions.
Following the transaction being completed, Mastercard said Finicity’s new analytics platforms will help streamline the credit decisioning processes for consumers and small businesses.
Further, the integration of Finicity’s account owner verification tools to Mastercard’s New Payment Platform capabilities is meant to improve the real-time payments experience to consumers, merchants and businesses.
Finicity chief executive and co-founder Steve Smith said: “Since our founding, Nick Thomas and I have focused on developing industry-leading technology and building an organisation that empowers consumers and organisations to better understand, manage and use their financial data to improve their financial lives.
“Enabling people to access and control their data while ensuring best practices to protect that data will continue to drive tremendous innovation that increases financial literacy, inclusion and health. This partnership with Mastercard helps us accelerate this mission globally.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
Sarah has a dual bachelor's degree in science and journalism from the University of Queensland.