More cross-border payments developments as Visa again dips into its coffers in acquisition mode, this time for the London-based fintech Currencycloud. Readers may recall our commentary on the Visa participation in a 2020 funding round for Currencycloud, so this is not a surprising investment, given the numerous acquisitions and other funding by the global network, and the heavy activity around the cross-border payments space. The announcement appears in businesswire and gives general highlights of the transaction.
‘Visa today announced it has signed a definitive agreement to acquire Currencycloud, a global platform that enables banks and fintechs to provide innovative foreign exchange solutions for cross-border payments. The acquisition builds on an existing strategic partnership between the two companies and values Currencycloud at £700 million, inclusive of cash and retention incentives. The financial consideration will be reduced by the outstanding equity of Currencycloud that Visa already owns….Currencycloud’s cloud-based platform offers a broad set of APIs enabling banks and financial services providers to offer currency exchange services, including real-time notifications on foreign exchange transactions, multi-currency wallets, and virtual account management. The Currencycloud platform supports nearly 500 banking and technology clients with reach in over 180 countries.’
The Currencycloud platform is mainly for banks and other fintechs to build their own API-based cross-border experiences, or choose an out-of-the box solution to which they can apply some custom, white labeled features. The acquisition by Visa fits in with their network of networks approach to capitalizing on an extensive global reach with new products and services for their core clients (banks) but also recognizing the increasing presence of fintechs collaborating with banks and also developing their own direct to client capabilities in an increasingly open banking financial environment.
‘Cross-border payments have seen significant growth due to rising demand from businesses of all sizes to engage in international trade. A recent study revealed that 43% of all small businesses conducted international trade in 2020.1 The addition of Currencycloud’s capabilities to Visa’s network will widen access to innovative international payment products that help businesses meet their cross-border needs.’
Overview provided by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group