Global digital payments network Visa (V) has signed a definitive agreement to buy open banking platform Tink for €1.8 billion. The transaction will be funded with cash in hand and retention incentives.
Tink allows financial institutions, fintech companies, and merchants to access aggregated financial data, use smart financial services such as risk insights and account verification, and build personal finance management tools. As per open banking laws, banks are required to give registered third-party providers access to customer data.
CEO and Chairman of Visa, Al Kelly, said, “By bringing together Visa’s network of networks and Tink’s open banking capabilities we will deliver increased value to European consumers and businesses with tools to make their financial lives more simple, reliable and secure.”
In January, Visa was forced to drop a similar buyout deal with Plaid, a U.S. data-sharing platform, as regulators rejected the deal on antitrust grounds. (See Visa stock chart on TipRanks)
Robert W. Baird analyst David Koning maintained a Buy rating on the stock with a price target of $282, implying 18.7% upside potential from current levels.
Koning said, “Roughly ~3.5 billion Visa-branded cards are currently in circulation, with total annual purchase volume of ~$8.8 trillion. Given the company’s well-established brand and extensive merchant-acceptance network, we believe Visa’s business model would be difficult for competitors to replicate.”
Based on 19 Buys and 2 Holds, the stock has a Strong Buy consensus rating. The average Visa analyst price target of $269.20 implies 13.2% upside potential from current levels. Shares have gained 22.6% over the past year.
Furthermore, Visa scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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