The cash-and-stock deal will help the companies launch new products, expand internationally and capitalize on consumers’ shift to digital finance, according to the CEOs of both companies.
SoFi CEO Anthony Noto said that a shift to digital has been accelerated by the coronavirus shutdown as people lose access to physical bank branches.
“It’s the right time to do something like this — we’re on the precipice of a transition to digital from physical finance,” Noto told CNBC in a phone interview. “It’s going to serve people in this environment and the need for mobile financial services is only going to accelerate.”
Galileo has been around for a decade longer than its acquirer. The Salt Lake City, Utah-based software company connects banks to credit card processors through APIs, or application programming interface software. The two companies first started working together early last year when SoFi began using Galileo as its payments processor for SoFi Money.
Deal conversations began before “things got challenging” due to coronavirus, but they were able to continue despite the current economic slowdown, according to Noto and Galileo CEO Clay Wilkes.