Visa has signed a definitive agreement to acquire London-based payments startup Currencycloud, Visa announced today. The acquisition builds on an existing strategic partnership between the two companies.

Visa had led an $80 million investment round for Currencycloud at the beginning of 2020. Therefore, the final amount Visa will pay for Currencycloud will be reduced by the outstanding equity it already owns. The deal pegs the valuation of Currencycloud at £700 million, inclusive of cash and retention incentives.

Currencycloud will continue to operate from its London headquarter and will retain its current management team. The finalisation of the deal is subject to regulatory approvals and other customary closing conditions.

Currencycloud is a cloud-based global platform that helps banks and fintechs to provide innovative foreign exchange solutions for cross-border payments. Its wide range of APIs enables clients to offer myriad features like real-time notifications on foreign exchange transactions, multi-currency wallets, and virtual account management. Founded in 2007, the startup’s platform currently supports almost 500 banking and technology clients with a global reach across more than 180 countries.

Currencycloud will strengthen Visa’s existing forex capabilities and enable it to better serve financial institutions, fintechs and partners while enabling new use cases and payment flows, Visa said. Moreover, Currencycloud will also help accelerate the time-to-market and improve payment transparency for Visa clients. This will help Visa clients to provide flexible, digital-first, international payment services that offer better visibility and control.

Cross-border payments have witnessed significant growth over the last few years. This growth has been driven by increasing demand from businesses of all sizes to engage in international commerce. A recent study shows that 43% of all small businesses conducted international trade in 2020.

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, the press release noted.

Colleen Ostrowski, Visa’s Global Treasurer, said,

“The acquisition of Currencycloud is another example of Visa executing on our network of networks strategy to facilitate global money movement. 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.”

Visa’s acquisition of Currencycloud would mark the payment giant’s second fintech deal this year. Last month, it had inked a deal to buy Swedish open banking platform Tink for $2.2 billion. Earlier in the year, Visa’s plans to acquire U.S. fintech firm Plaid were thwarted by US regulators.

Mike Laven, CEO of Currencycloud, said,

“At Currencycloud, we’ve always strived to deliver a better tomorrow for all, from the smallest start-up to the global multi-nationals. Re-imagining how money flows around the global economy just got more exciting as we join Visa.

 

The combination of Currencycloud’s fintech expertise and Visa’s network will enable us to deliver greater customer value to the businesses moving money across borders.”

Featured image credit: Image by Miloslav Hamřík from Pixabay