Mastercard Pays Up to $985M for Fincity

Mastercard agreed to pay as much as $985 million for Finicity, a provider of consumer budgeting, verification and financial-health solutions.
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Mastercard  (MA) - Get Report agreed to buy Finicity, a consumer-financial-data and verification-solutions company, for $825 million plus potentially an additional $160 million conditioned on the acquired company's performance.

Mastercard has been investing in fintech in recent years, including the launch of comprehensive open banking solutions in 2019. 

"Open banking is a growing global trend and a strategically important space for us," said Michael Miebach, president of Mastercard. 

"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." 

The company says that Finicity's tech will help enhance Mastercard's open-banking platform by allowing the company to expand in North America and elsewhere.

Finicity's new analytics platforms will help "streamline the credit decisioning process for consumers and small business," Mastercard said in a statement.

Fincity's owner-verification tech will be added to Mastercard's New Payment Platform capabilities to improve real-time payments experiences for Mastercard customers. 

In April, Mastercard reported first-quarter earnings results that topped estimates. 

Adjusted earnings per share totaled $1.83 in the quarter, up from $1.78 a year earlier and above analysts’ average forecast of $1.72, according to FactSet.

Revenue registered $4 billion in the latest quarter, up 3% from $3.9 billion a year earlier and above analysts’ prediction of $3.96 billion.

GAAP net income totaled $1.7 billion in the latest quarter, or $1.68 a share, down from $1.9 billion, or $1.80, a year earlier.

The coronavirus pandemic, which has crimped global spending, didn’t help matters. “Covid-19 has made this a very trying time for everyone,” Mastercard Chief Executive Ajay Banga said in a statement.