London-based GoCardless, a payment company that claims to make collecting payments by direct debit easy for everyone, announced on Friday that it plans to acquire Riga, Latvia-based Nordigen, a freemium open banking data provider.
The deal was signed on June 30, 2022, and is expected to close later in the summer. The development comes as GoCardless is building on its vision to become the world’s bank payment network.
Nordigen’s free open banking platform
Nordigen is the brainchild of co-founders Roberts Bernans and Rolands Mesters, who were intent on bringing innovation to the world of finance in 2016. With Nordigen, they want to democratise access to financial data with Europe’s first free PSD2 data API and a range of data enrichment products.
The Latvian fintech startup has helped global clients extract value from data to make better decisions, especially when it comes to estimating the creditworthiness of loan applicants.
Nordigen’s free API connects to more than 2,300 banks in Europe and serves fintech companies and developers in 31 European countries, including the UK. It helps them leverage open banking data for lending, personal finance, automated customer screening and customer onboarding.
CEO Rolands Mesters says, ”At Nordigen, our mission is to help businesses around the world adopt and utilise open banking, enabling greater financial transparency and financial inclusion. We share GoCardless’s excitement about the growth of open banking, and we’re delighted to join forces with a group of people who not only share our passion for driving game-changing innovation in financial services, but will also help us bring free open banking access to a far wider audience.”
Nordigen is a licensed Account Information Service Provider (AISP), regulated by the Financial and Capital Market Commission of Latvia.
Aim of this development
The announcement is the latest move from GoCardless as it accelerates its open banking strategy. GoCardless will now be able to provide free open banking connectivity at scale, opening self-serve access to account information services (AIS) to everyone.
In addition, its suite of premium data products will also help improve outcomes across a range of use cases from credit assessments to customer engagement.
In the last 18 months, GoCardless has introduced Verified Mandates, which combines AIS and direct debit to avoid fraud, and Instant Bank Pay, a product that is open banking-enabled and available in many regions.
Through this latest agreement, GoCardless will be able to obtain internal open banking connections, which it intends to build upon in the near future by broadening its reach and including additional payment types like variable recurring payments.
Co-founder and CEO of GoCardless, Hiroki Takeuchi, says, “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 $400B. 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.
“The Nordigen acquisition will take us to the next level. By intelligently combining free, state-of-the-art open banking connectivity with deep payment expertise, we can now offer open banking-as-a-service to any developer, partner or fintech. We believe this open access will lead to experimentation, and that will create even more compelling use cases. We’re excited to redefine what open banking can do with the talented Nordigen team now on board,” adds Takeuchi.
Founded in 2011 by Hiroki Takeuchi, Matt Robinson and Tom Blomfield, GoCardless helps businesses process recurring payments around the world. The company’s platform and global payments network make receiving payments easier for 70,000 organisations worldwide, including large corporations and small enterprises.
GoCardless claims that each year, it processes over $30B (approx €26.2B) of payments across more than 30 countries for companies, including DocuSign, Klarna, TripAdvisor, and Epson, among others. The company has already helped thousands of merchants in the UK and Europe process millions of dollars worth of one-time payments.
Recently, Klarna, a Swedish company known for its Buy Now, Pay Later (BNPL) service, partnered with GoCardless to offer bank debit payments to its over 21 million customers in the US. Also, PayPal and GoCardless have signed a strategic agreement that will see GoCardless become a direct debit partner for PayPal.
Besides the UK, GoCardless has additional offices in Australia, France, Germany, and the US.