Visa invests in data startup Basiq

The move points to payments and broader data sources being combined to improve digital services across the economy. Visa joins National Australia Bank and Westpac’s venture capital fund Reinventure Group, and US-based software players Salesforce and Plaid, as investors in Basiq, which sits between more than 100 banks and around 200 fintechs.

Through a process known as screen scraping, Basiq allows fintech customers to access the data in their bank accounts. Basiq is accredited to operate in Open Banking, which regulates this process, and is providing data services under the new regime.

Visa’s investment in Basiq comes on the back of its global ‘network of networks’ strategy, under which Visa is investing beyond its core payments network, which processes global debit and credit card transactions. It wants to ensure its networks remain relevant as alternative payment infrastructure is built.

For example, if the federal government adds an ‘action initiation’ power to the Open Banking regime – as recommended to Treasury – this could see the Open Banking infrastructure (part of the consumer data right) be used to make payments in competition with Visa’s existing network.

The equity investment (Visa and Basiq declined to reveal the amount) comes after Visa bought Tink, a Sweden-based Open Banking fintech, for USD 2.2 billion in June 2021. It also comes almost a year after the US Department of Justice rejected Visa’s USD 5.3 billion acquisition of Plaid, on concerns it would give Visa too much market power in digital card payments. Plaid has a similar business to Basiq in the US, building connections between US banks and fintechs using application programming interfaces (APIs).

Visa still maintains an equity investment in Plaid, which also has a strategic partnership with Basiq, which is seeing the two companies connect fintechs to banks between Australia and the US. Afterpay venture fund AP Ventures is also an investor in Basiq. Afterpay is using Basiq to categorise transactions and create personalised customer experiences.

Visa’s investment in Basiq, which has been accredited as a data recipient under the consumer data right by the Australian Competition and Consumer Commission, comes less than three months after Mastercard unveiled its intentions to participate in Open Banking in Australia with new products. Mastercard paid USD 825 million in 2020 for US-based company Finicity, which builds APIs that connect to banks to extract data. Finicity is preparing to enter Australia through Mastercard, where it will compete with Basiq.