GoCardless goes after Plaid with Nordigen buy

GoCardless, a London-based account-to-account payments firm, has acquired Latvian open banking startup Nordigen in a bid to enter the data connectivity market.

Why it matters: The deal positions GoCardless as a potential freemium competitor to Plaid in the data connectivity space.

How it works: Nordigen operates on a freemium model, first providing free, API-based open banking data connectivity for developers between bank accounts — with end user consent, of course.

• It then charges banks, fintechs, and developers for additional premium data and analytics services to make sense of that data.
• Since being founded, the company has built integrations with more than 2,300 banks in 31 countries throughout Europe.

What's next: GoCardless hopes to build a new account-to-account payments network that is as seamless to use as card transactions but without the high merchant fees charged by big credit card incumbents.

• The deal lets GoCardless own its data connectivity services, rather than having to go through a third party like Plaid — in Europe, at least.

The intrigue: While U.S.-based Plaid got its start as a data connectivity provider that has backed into offering account-to-account payments, GoCardless is taking the opposite route.

• GoCardless plans to take Nordigen's open banking platform and bring it to other markets it operates in, like North America and Australia.

What they're saying: "When we first started in open banking, we would use third parties to access it, and our theory was that this is all going to commoditize and that really hasn't happened," GoCardless chief product and growth officer Duncan Barrigan tells Axios.

• "So instead, we're going to commoditize this ourselves," he said.