London-based GoCardless wants to bolster its bank payment network with plans to acquire open banking data provider Nordigen.
Fintech unicorn GoCardless, which bagged $312 million (£230 million) funding in February, will incorporate Nordigen’s open banking connectivity, and so connect 2,300+ banks in 31 countries into its account-to-account network. Financial details about the acquisition were not disclosed.
Nordigen is based in Latvia and was founded in 2016. Use cases mentioned on its website include accounting, lending and personal finance. GoCardless also talks about Nordigen’s suite of premium data products for use cases such as credit assessments and “customer engagement”.
Hiroki Takeuchi, Co-Founder and CEO of GoCardless, explains: “Over the past few years it’s been amazing to watch open banking grow from a trend on the horizon to a global phenomenon which has given rise to a market worth over $400 billion [£330.3 billion]. We realised early on that this technology would drive bank payments for decades to come and over the last 18 months, we’ve accelerated our push into open banking as part of our vision to build the world’s bank payment network.”
GoCardless plans to expand coverage and add new payment types such as variable recurring payments (VRPs). It will have to play catch up as TrueLayer and Ozone API have already made VRP API launches – with TrueLayer being particularly active.
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Nordigen has 73 employees listed on LinkedIn and it’s not absolutely clear if jobs are safe. Although, Takeuchi adds: “We’re excited to redefine what open banking can do with the talented Nordigen team now on board.”
The popularity of open banking is not in doubt. In the UK, the Open Banking Implementation Entity announced last month that more than six million individuals and businesses use open banking services.
GoCardless’ network and technology platform is used by 70,000 businesses worldwide, from multinational corporations to small businesses. Each year GoCardless says it processes over $30 billion (£24.7 billion) of payments across more than 30 countries. The fintech company has additional offices in Australia, France, Germany and the US.
In May GoCardless appointed Paul Stoddart as President. Stoddart joined from Mastercard where he was President of its New Payment Platforms, Executive Chairman of Vocalink and a Member of the Mastercard Management Committee.
GoCardless will feel things are moving in the right direction. Over the past 18 months it has launched its open banking-enabled Instant Bank Pay feature across various markets, as well as Verified Mandates, which combines account information service (AIS) with direct debit to prevent fraud.
The Nordigen deal is expected to close later in the summer.