Tag: fintech

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Visa to purchase Swedish fintech start-up Tink

Visa to buy Swedish fintech start-up Tink

Visa Inc. credit and debit cards are arranged for a photograph in Washington, D.C., U.S., on Monday, April 22, 2019.

Andrew Harrer | Bloomberg | Getty Images

LONDON — Visa agreed Thursday to acquire Swedish financial technology start-up Tink for 1.8 billion euros ($2.1 billion), in a deal aimed at bolstering the payment giant’s digital ambitions.

The deal comes after Visa’s bid to buy Plaid, an American rival to Tink, was torpedoed by U.S. regulators. Plaid has since opted to go it alone as an independent company, and was last privately valued by investors at $13.4 billion.

Both Plaid and Tink operate in a nascent space known as opening banking, which calls on lenders to provide third-party firms with access to coveted consumer banking data, provided they’ve got consent. The space has flourished in Britain and the EU thanks to new regulation.

“Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals,” Al Kelly, Visa’s CEO, said in a statement.

Tink co-founders Daniel Kjellén and Fredrik Hedberg.

Tink

“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.”

Founded by Swedish entrepreneurs Daniel Kjellén and Fredrik Hedberg in 2012, Tink initially started out as a financial management app but later pivoted to focus on providing its technology to other businesses instead.

Tink’s technology lets banks and fintech firms access banking data to create new financial products. The Stockholm-based company was last privately valued at 680 million euros. It has raised more than $300 million from investors including PayPal, SEB and ABN AMRO.

Visa’s acquisition of Tink is the latest in a wave of consolidation efforts in the massive payments industry. The company had tried to buy Plaid last year, but ultimately abandoned the takeover after the U.S. Department of Justice sued to block it on antitrust grounds.

The deal with Tink is subject to regulatory approvals and other customary closing conditions, Visa said, adding it will be financed solely with cash and won’t impact the company’s stock buyback program or dividend policy.

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Business

Walmart nabs Goldman Sachs bankers to assist lead its new fintech start-up

Walmart to create fintech start-up with investment firm behind Robinhood

Cars drive past a Walmart store in Washington, DC on August 18, 2020.

Nicholas Comb | AFP | Getty Images

Walmart has snapped up two veteran Goldman Sachs bankers to help advance the new fintech startup as the company looks beyond retail to drive sales.

Omer Ismail, who runs Goldman’s Consumer Bank, and David Stark, another Goldman banker, go to the retailer. A Goldman Sachs spokesman confirmed her departure. The news was first reported by Bloomberg.

Walmart announced in January that it was starting a new company to create unique, affordable financial products for customers and employees. The company has teamed up with Ribbit Capital, a venture capital firm, but will hold a majority stake in the start-up. Walmart did not disclose the company’s name or when services would be available. Walmart executives, including CFO Brett Biggs and John Furner, CEO of Walmart US, will serve on the startup’s board of directors.

Walmart said it could acquire or work with other fintech companies as part of the company.

The discounter declined to share details beyond what the company previously announced.

With the hiring, Walmart is showing that it’s serious about growing its financial services business. This also underscores the company’s strategy for the coming years. Speaking on a recent investor’s day, CEO Doug McMillon said the world’s largest retailer wants to use its size and size to grow sales in other areas, from opening health clinics to converting consumer data into targeted ads. He said it will deepen customer loyalty with its growing ecosystem of products and through its Walmart + subscription service. The plan is to increase the level of investment to achieve this, increasing it to about $ 14 billion for the coming year, compared to the typical annual rate of $ 10-11 billion.

Walmart already offers some financial services, such as a prepaid debit card that customers can top up with money and use to make purchases. The card is also an alternative for people with a difficult credit rating. It offers features like no overdrafts or monthly fees and no minimum balance required.

The company’s shares are up nearly 23% over the past year and have a market value of more than $ 374 billion.

Categories
Business

Walmart to create fintech start-up with funding agency behind Robinhood

Walmart to create fintech start-up with investment firm behind Robinhood

Cars drive past a Walmart store in Washington, DC on August 18, 2020.

Nicholas Comb | AFP | Getty Images

Walmart said Monday that a fintech startup is making it with Ribbit Capital, one of the venture capital firms behind Robinhood.

The big box dealer did not disclose the name of the new company, nor did they indicate when their services would be available. The company will develop unique and affordable financial products for Walmart employees and customers.

Shares rose more than 2% after close of trading on Monday. Walmart’s market cap is $ 416.7 billion.

The fintech startup will be majority-owned by Walmart and its board of directors will include several company executives including CFO Brett Biggs and Walmart’s US CEO John Furner. It said it will also appoint independent industry experts to the board and may acquire or work with other fintech companies.

“For years, millions of customers have trusted Walmart not only to save money shopping from us, but also to help them manage their financial needs,” Furner said in a press release. “And they made it clear that they want more from us in the financial services sector.”

With more than 4,700 stores across the country, Walmart interacts with millions of customers each year – including some who have no relationship with a bank or financial advisor.

Six percent of adults have no checking, savings, or money market accounts, according to the Federal Reserve. About 16% are “under-banked,” which means they have a bank account, but also use alternative financial services products such as a money order. These Americans are more likely to turn to short-term solutions like a pawn shop or payday loan, which can result in additional fees or high interest fees.

Walmart already offers some financial services to customers. For example, it has Walmart MoneyCard, a prepaid debit card that customers can top up with money and use to make purchases. The card has some features that will promote money management or help people who may have poor credit ratings, such as: B. No overdraft fees, no monthly fee and no minimum balance requirement.

The retailer also offers alternative payment plans for customers on a tight budget, e.g. B. Layaway and Affirm, a fintech company that allows customers to buy an online item instantly and pay for it in installments.

Walmart’s co-owner of the new venture, Ribbit Capital, has invested in fintech companies in the past. The portfolio includes Affirm; Robinhood, a royalty-free start-up; and Credit Karma, a company that offers consumer-friendly tools like free credit checks.