Visa to acquire Plaid, the fintech powering Venmo and other banking apps, in $5.3 billion deal

guest · Jan 13, 2020

Visa to acquire Plaid, the fintech powering Venmo and other banking apps, in $5.3 billion deal
Plaid says 25% of people in the United States with bank accounts have connected to the fintech company through an app
January 13, 2020
https://www.cnbc.com/2020/01/13/vis...d-other-banking-apps-for-5point3-billion.html

Payments giant Visa is buying Silicon Valley start-up Plaid in a deal worth $5.3 billion, the companies announced Monday.

Plaid’s API software, often referred to as the “plumbing” behind fintech companies, lets start-ups connect to users’ bank accounts. It’s well-known among financial technology developers, but the average person interacting with it most likely wouldn’t recognize the name.
High-profile Plaid customers include popular peer-to-peer payment app Venmo, mobile investing app Robinhood and cryptocurrency exchanges Coinbase and Gemini.

The company says it integrates with more than 11,000 banks and connects to more than 20 million consumer accounts. While it does not give specific numbers or a full list of companies, Plaid said its customer base doubled from 2017 to 2018 and has expanded to the U.K. and Canada.
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Visa: Visa To Acquire Plaid
Plaid: Plaid is joining Visa

guest · Oct 27, 2020

Visa $5.3 billion Plaid deal triggers DOJ antitrust concerns
October 27, 2020
https://www.americanbanker.com/articles/visa-5-3-billion-plaid-deal-triggers-doj-antitrust-concerns

Visa’s $5.3 billion acquisition of Plaid has raised competition concerns at the U.S. Justice Department, which is nearing a decision about whether to sue to block the deal, according to two people familiar with the matter.

Lawyers at the Justice Department’s antitrust division who are investigating the takeover are worried the deal could allow Visa to acquire a potential competitor, said the people. The division’s leadership hasn’t made a final decision about whether to sue.
The Justice Department, Visa and Plaid declined to comment.
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“We certainly are expecting to close by the end of the calendar year and are doing everything we can to comply with any request from the regulators that are looking at it,” Chief Executive Al Kelly told analysts on a conference call in July.
The Wall Street Journal reported earlier on the Justice Department’s concerns.
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The Wall Street Journal: Visa’s Planned Purchase of Plaid Faces Antitrust Scrutiny at the Justice Department

The DOJ, making preparations for potential litigation, could soon decide whether it will sue to block Visa’s purchase of the fintech firm
Visa Inc.’s $5.3 billion deal to buy a key player in the financial-technology space is in jeopardy because of antitrust concerns, according to people familiar with the matter.

The Justice Department could decide soon whether it will sue to block Visa’s acquisition of Plaid Inc., a firm that provides the technological infrastructure underpinning an array of next-generation financial apps. After spending the better part of the year scrutinizing the deal, the department is concerned it could limit nascent competition in the payments...
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guest · Nov 6, 2020

DOJ sues to block Visa acquisition of fintech startup Plaid
November 5, 2020
https://edition.cnn.com/2020/11/05/business/doj-lawsuit-visa-plaid-acquisition/index.html

The federal government is suing to block Visa's $5.3 billion acquisition of fintech startup Plaid, alleging the merger violates antitrust laws.

Visa (V) in January announced plans to acquire Plaid, which makes digital infrastructure linking financial data from people's bank accounts to the apps they use to manage their money such as Venmo, Coinbase and Expensify.
The US Justice Department alleged Thursday that Visa is a "monopolist in online debit transactions" — and a new service in development by Plaid could pose legitimate competition to Visa's business, according to the complaint in US District Court in Northern California.

"By acquiring Plaid, Visa would eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debt services for merchants and consumers," the DOJ alleges.
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Fear that Plaid's new service would compete with its business fueled Visa's decision to acquire Plaid, the DOJ alleges.
Visa pushed back on those allegations, saying Plaid is not a competitor or a payments company, but rather that "its capabilities complement Visa's."
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DoJ: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
Complaint: https://www.justice.gov/opa/press-release/file/1334726/download

guest · Jan 12, 2021

Visa abandons $5.3 billion acquisition after DOJ objections
The company says it would have taken too long to resolve litigation.
January 12, 2021
https://www.engadget.com/visa-plaid-acqusition-doj-233500519.html

Visa has abandoned its $5.3 billion bid to acquire fintech startup Plaid. In an announcement on Tuesday, the US Department of Justice said the two companies have agreed to call off their merger. The agency filed a lawsuit to block the deal last November, alleging at the time that, had it gone through, it would have allowed Visa to eliminate the startup as a “competitive threat to its online debit business before Plaid had a chance to succeed.”

In a press release confirming the news, Visa said it believes it could have won the case, which was slated to go to court in June.

“We are confident we would have prevailed in court as Plaid’s capabilities are complementary to Visa’s, not competitive,” said Al Kelly, the CEO and chairman of Visa. “However, it has been a full year since we first announced our intent to acquire Plaid, and protracted and complex litigation will likely take substantial time to fully resolve.”
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DoJ: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

The Department of Justice announced today that Visa Inc. and Plaid Inc. have abandoned their planned $5.3 billion merger.
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