What happened — Payment network Visa acquired Sweden based fintech, Tink, in a $2.1 billion deal, in a bid to expand business beyond the core card network.
Imagine how you can link your bank account to a payment app? Tink basically works with banks to build that infra, which it then offers as a single API to developers, to be able to make connections and link accounts — making users’ banking and transactional information portable.
Why does it matter — Last year, Visa had tried buying out the market leader in open banking — Plaid, but that deal was blocked by regulators, with Plaid eventually walking away. A bruised Visa was looking for a comeback, and Tink is finally its pick. Tink has 250M users.
Big picture — Visa’s business is basically being threatened by the rise of digital wallets, which coupled with QR codes, are rendering “cards” useless. Owning the protocol that links users’ bank accounts with disparate fintech’s is one way to defend its eventual disruption.