Deutsche Bank has acquired an equity stake in US digital payments startup, Modo to expand payments business to non-bank platforms.
Modo offers a cloud-based utility platform that can work with banks, networks, processors as well as partners. The platform facilitates interoperability between payment systems.
The deal is part of Deutsche Bank’s strategy to boost its transaction banking franchise.
The German banking group said that Modo’s technology will complement its existing digital business-to-business and business-to-consumer payments operations.
The acquisition is expected to extend Deutsche Bank’s footprint into non-bank payment platforms such as Alipay, Paypal, M-Pesa and WeChat.
The bank added that it will focus its digital payments business on mobile wallets and peer-to-peer networks.
Deutsche Bank global head of cash management, Michael Spiegel said: “Modo’s technology will allow us to provide new transaction services and payment alternatives for the rapidly growing digital economy, for example, vendors who provide products or services like entertainment content or application development and want to be paid in their mobile wallets, an important area of growth.”
Financial details of the transaction have not been disclosed.
Deutsche Bank head of global transaction banking, John Gibbons said: “Our investment and partnership with Modo will help us to provide our corporate and institutional clients with new digital payment functionalities and accordingly more flexibility in facilitating these transactions.
“Going forward, we will be able to directly process payments to mobile wallets and app-based payment solutions.”