Yapily announces it has signed an agreement with SCHUFA to acquire finAPI, Germany’s leading provider of open banking solutions.
According to Yapily’s website, the deal will make Yapily the largest open banking payments platform in Europe.
Yapily’s customer base is expected to double with the acquisition as it will add well-established finAPI clients to its roster, including over 50 large enterprises in the financial, insurance, and IT sectors.
Yapily will have a significant presence in the UK and Germany, two of Europe’s largest markets.
Yapily will expand its geographic footprint by entering the Czech Republic, Slovakia, and Hungary, expanding its reach to millions of people and businesses across Europe. It currently covers 16 countries across Europe.
Verena Van Engen, Senior Marketing Communications Manager at finAPI, explains, “we are excited about getting started together with Yapily as soon as the regulatory approvals for the merger are obtained, which is expected to be in the second half of the year.”
Open banking saturation
Several new players are entering the open banking market, which leads many to question whether the market is oversaturated and the impact this will have.
Alessandro Hatami, the founder of Pacemakers, says, “every PISP, AISP, banking API platform and in general tech services provider to banks is positioning itself as a banking platform. Also, card schemes are increasingly talking about entering the fray – and they have deep pockets and huge relationship networks. This means competition at the global level is fierce and will become even more so in the near future. So it makes real sense for API businesses to join forces to expand their capabilities and market reach. I think we will see many more deals along the lines of the FinAPI Yapily deal.”
Indeed, as the number of players raising money and collaborating in the open banking space increases, there will undoubtedly be more deals in this space in the future.
For instance, Bud Financial raised £80 million in the past week, and Token raised $40 million.
However, Engen emphasizes their unique approach is what sets this deal apart.
“Yapily’s core DNA as a fintech and open banking enabler aligns with our infrastructure-first approach. The products developed by finAPI and Yapily, and the industries in which our customers operate, are complementary and complement each other. Together, we are thus perfectly positioned to lead the European Open Finance agenda and make the financial lives of millions of people easier, safer, and more convenient.”
Regardless, the consolidation of open banking will benefit consumers as deals like this mark a growing trend of increased interoperability in open banking.
According to Deloitte, this trend will continue to grow and consolidate all financial data in one app wherein customers can view, edit, and control all their accounts globally with a single login. The application can be integrated with other services such as balance in meal cards, flight, and hotel information.
This will ultimately benefit consumers as they will be creating their own bespoke banking experience in one convenient platform while also helping from the exposure to new types of products.
Engen agrees, “our customers will benefit from new opportunities for business growth, gaining access to pan-European markets through greater coverage and resources. The combined offering will also bring several finAPI solutions to the table for new and existing Yapily customers, including identity and age verification and legally compliant KYC checks and digital account checks that can be used for automated credit scoring.”
Regulatory approval is required, and the deal should close in H2 2022.
Currently, finAPI will operate in Germany as an independent, regulated company. SCHUFA Holding AG will sell its 75% participation in finAPI to Yapily.
Upon completion of the transaction, finAPI and SCHUFA will continue to play an essential role in the unified entity.
Helen Femi Williams is a freelance journalist and podcaster interested in fintech, politics, economics, and their intersections.
She is the host of the letsgetlitical podcast, a fortnightly show interviewing guests from all different sides of the political spectrum, in partnership with the Mozilla Foundation.
Prior to this role, she worked as an innovation consultant developing insurtech and fintech products and ideas for brands, startups, and major corporations.
She studied International Relations at the University of Nottingham (UK and Malaysia).