As SoFi acquires Galileo payment processing firm, the prospects of digital banking look promising even in today’s tough economic times. SoFi has given the go-ahead to purchase payment processor Galileo for $1.2 billion. The platform is exploring digital financial management solutions due to the rise in physical bank branch closures.
We’re thrilled to announce that we’ve acquired @Galileo_Tweets, the company behind the API and payments platform that powers not only our #SoFiMoney product, but numerous other innovative fintech payment offerings all over the world.
— SoFi (@SoFi) April 7, 2020
Galileo provides the connection between credit card processors and banks using APIs. The same APIs power SoFi cash management solutions at present. Even other notable platforms like Revolut and Chime also use Galileo APIs to ensure smooth payment processing. As SoFi acquires Galileo, these APIs remain a key component.
SoFi acquires Galileo to acquire advance APIs
As SoFi acquires Galileo, the former has plans to employ the latter’s superior API technology to explore new avenues in financial services. The official press statement further says that SoFi is excited to deliver more value to its users by deploying its advanced APIs, especially in the realm of critical financial services where speed and security are a priority.
The deal involves $75 million in cash payments, company stocks worth $875 million, and shelter financing debt amounting to $250 million. Galileo operations would continue till a formal deal is signed. Clay Wilkes, the chief operating officer of Galileo, would continue to run the platform. The deal materialized despite the current precarious financial situation courtesy COVID-19.
The acquisition represents hope for crypto despite COVID-19 turmoil
The deal will benefit Galileo as well. Wilkes says that the payment processor can now look forward to offering lending services to its customers. He adds that SoFi can help fill product gaps in the firm’s portfolio. The current period is perfect for adding new services.
Similarly, the chief executive officer of SoFi, Anthony Noto, says that the COVID-19 pandemic has led to a renewed interest in digital banking services. As physical banking infrastructure crumbles, virtual banking solutions are rising to meet the challenge. The present financial downturn will mark the turning point when people transitioned to digital financial services. When SoFi acquires Galileo, the digital and virtual monetary solutions emerge as the winner in the banking realm.