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Payments firm Visa (V) has snapped up London fintech company Currencycloud for £693m ($951m) as it looks to widen access to international payment products and diversify its revenues.
Currencycloud is a global platform that enables banks and fintechs to provide foreign exchange solutions for cross-border payments, including real-time notifications on transactions, multi-currency wallets and virtual account management.
It currently supports almost 500 banking and technology clients, including Starling Bank and Revolut, processing more than $100bn (£73bn) to more than 180 countries across the globe.
The move builds on an existing partnership between the two companies, and the value to the deal will be reduced by any outstanding equity of Currencycloud that Visa already owns. Visa has been a Currencycloud shareholder since 2020.
“The acquisition of Currencycloud is another example of Visa executing on our network of networks strategy to facilitate global money movement,” said Colleen Ostrowski, Visa’s global treasurer.
“Consumers and businesses increasingly expect transparency, speed and simplicity when making or receiving international payments. With our acquisition of Currencycloud, we can support our clients and partners to further reduce the pain points of cross-border payments and develop great user experiences for their customers.”
Currencycloud confirmed that it would continue its operations from its London base, and would retain the current management team.
The transaction is still subject to regulatory approvals and other customary closing conditions.
It comes as Visa and its rival MasterCard are pushing into fintech amid the rise of systems beyond credit card payments such as Apple Pay. Card companies have also recently faced rising pressure from regulators with regards to their fees.
Last year, Visa attempted to buy bank information sharing startup Plaid for $5.3m, however, the Department of Justice (DoJ) filed suit to block the deal in November.
It argued that merger of the two companies would “eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers.”
After the failed deal, Visa announced plans to acquire European-focused Tink for $2.1bn. Tink allows customers to connect to bank accounts from their own apps and services through a single application programming interface (API).
It integrates with 3,400 banks and financial institutions, with clients including PayPal, BNP Paribas and American Express.
Cross-border payments have seen significant growth recently due to rising demand from businesses to engage in international trade. A recent study from Mercator Advisory Group revealed that 43% of all small businesses conducted international trade in 2020.
"Currencycloud's acquisition so soon after Wise's (WISE.L) successful listing is a sign of the maturity of these businesses, which were pioneers in changing the way cross-border money transfers are done. It's also a sign of the maturing of the UK fintech industry, and I expect to see more companies of a similar age looking to exit in the near future," Sarah Kocianski, analyst at fintech consultancy 11:FS, said.
"From Visa's perspective, this acquisition is a logical step after an earlier investment and the formation of a strategic partnership with Currenycloud. This is the second big acquisition of a fintech by Visa recently (the other being Tink), and we can expect to see more by both Visa and its peers.
"That's because fintechs are looking to exit while the environment is favourable, and larger companies want to expand their capabilities to keep up with innovators and customer demand, in a way that's faster than trying to do so in-house."
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