Credit Sesame has acquired challenger bank Stack as it moves further into banking

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The US-based fintech has completed the purchase of Canadian challenger bank Stack, per Business Insider. Credit Sesame offers personal credit management services — including free credit scoring and insights into how to improve credit scores — alongside loan recommendations and its newly launched checking account. 

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Stack provides a prepaid Mastercard that offers additional features, including instant cash back and money management features; it’s also a vendor of white-label technology to financial institutions (FIs). Stack’s employees will be integrated into Credit Sesame’s workforce, and it will continue to offer its digital banking product and sell its white-label technology.

The acquisition follows the inception of their commercial partnership in 2019. In partnership with Stack, Credit Sesame launched Sesame Cash, a checking account, in March of this year. Sesame Cash offers users new features including real-time notifications, an early payday option, and a Mastercard debit card with accompanying management tools within its app, among others features. Credit Sesame has already had 200,000 users sign up, and the success of the launch, alongside shared ambitions to innovate banking, likely encouraged Credit Sesame to pursue an acquisition of Stack.

We think the acquisition is a wise move because it will fuel Credit Sesame’s strategic ambitions for both international expansion and building out its banking platform.

• The acquisition will give Credit Sesame access to the Canadian market. Credit Sesame’s credit platform and services will be integrated into Stack’s offering thanks to the acquisition, giving Credit Sesame access to Stack’s existing customer base and the broader Canadian market. This is Credit Sesame’s first foray into international expansion and aligns with the fintech’s vision to be a global leader.
• Going forward, the acquisition will unlock Credit Sesame’s ambitions to grow its banking product suite. With the purchase, Credit Sesame now has the back-end technology infrastructure to build out its banking platform. Credit Sesame will be able to accelerate the launch of new capabilities, such as automated savings and cash-back rewards, expanding the breadth of its services. This will likely help it further engage its existing user base and drive customer acquisition efforts.

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