SoFi has made a major move to add payments functionality to its personal finance platform by agreeing to acquire software company Galileo for $1.2 billion.

Galileo specializes in application programming interfaces (APIs) that power functionalities including account set-up, direct deposit, ACH transfer, transaction notifications, and point-of-sale authorization for fintech companies such as Monzo and Chime.

Globally, it processed more than $53 billion in payments volume last month, up from $26 billion in September 2019.

SoFi, which started out in 2011 as a provider of student loan refinancing, now offers a range of consumer financial options, including loan, investment and insurance products as well as cash and wealth management tools. Earlier this year, it began using Galileo as its payments processor for SoFi Money.

The leaders of both companies believe the deal will help them launch new products, expand internationally, and capitalize on consumers’ shift to digital finance that has been accelerated as people lose access to physical bank branches due to coronavirus lockdowns.

“We’re on the precipice of a transition to digital from physical finance,” SoFi CEO Anthony Noto told CNBC. “It’s going to serve people in this environment and the need for mobile financial services is only going to accelerate.”

The acquisition consists of $75 million in cash, $250 million in seller financing debt and $875 million in company stock, CNBC said, citing people familiar with the negotiations.

“As fintech valuations have rapidly expanded in recent years, the companies that empower those fintechs have increasingly become strategic for investors,” TechCrunch said, noting that earlier this year Visa bought Plaid for $5.3 billion.

Salt Lake City-based Galileo was founded in 2000 by Clay Wilkes and has been particularly successful in the United Kingdom, where all five of the country’s largest fintechs are customers.

SoFi offers “products that many of our leading fintech clients are asking for,” Wilkes said in a news release. “Distributing products through our enterprise-class API is the vision behind this combination. I think it’s very powerful.”

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