With the creation of many alternative payment methods during the pandemic, financial service companies are given the decision to either integrate themselves into the world of fintech or fall behind the others. Out of all of the major financial institutions globally, Visa continuously proves to be the most invested in expanding within the world of fintech. As of July 22, Visa has acquired its second major fintech company, the British payments start-up Currencycloud.
Currencycloud is a fintech company that sells software to banks and fintech firms to help process cross-border payments. They are best known for their behind-the-scenes work at major banking and payments apps such as Revolut and Monzo.
Colleen Ostrowski, Visa’s global treasurer, told CNBC News that this acquisition comes from the increasing demand from consumers and businesses for transparency and efficiency when it comes to international transactions. She believes that this acquisition of Currencycloud will better allow Visa to make the process of completing cross-border payments much easier, satisfying customers to the greatest extent.
The connection between Visa and Currencycloud formed back in 2020 with Visa’s $80 million investment in the fintech company. With the deal valuing Currencycloud at $962 million, Visa says the amount it’s paying will be reduced by the outstanding equity that they already own from the investment in 2020.
Currencycloud provides services to clients in over 180 countries, expanding Visa’s global reach immensely. The deal allows the company to maintain its London headquarters, as well as its current management team.
Taking a look at Visa’s prior fintech moves, they made two large decisions in June 2021. The first is Visa’s expansion of its Visa Fintech Partner Connect program designed to help clients get connected in the world of digital payments and become familiar with online banking platforms. Within the same month, Visa bought its first Swedish fintech start-up Tink, a platform used by banks and financial start-ups to create apps to keep track of customers’ finances all in one place, for $2.1 billion. Many people saw these as the first of many steps toward Visa fully entering the fintech world — and they were right.
The company strives to rival other credit card firms, particularly Mastercard, by providing customers with the most efficient services. Gaining a foothold in the world of fintech has allowed them to push forward thus far — each acquisition only makes the company stronger.
The chances that Visa’s acquisition of Currencycloud is their final move in the Fintech world is extremely slim. What will their next move be?
Browne, Ryan. “Visa Makes Another Big Bet on Fintech, Buying UK Payments Start-up Currencycloud.” CNBC, CNBC, 22 July 2021, www.cnbc.com/2021/07/22/visa-to-buy-uk-payments-start-up-currencycloud.html.