Visa Confirms it Has Called Off Merger Agreement Involving Plaid
Following the DOJ plaint, Visa has confirmed it has terminated the merger agreement to acquire Plaid. In January 2020, Visa had first announced its decision to acquire Plaid, a fintech startup. In November 2020, we reported how the Visa-Plaid deal was under serious threat. A law that was first passed in 1890 stands between fintech’s largest market share and fairness in the market. The DOJ had then docked this year’s biggest fintech acquisition for violating anti-trust norms as per the Sec.2 Sherman Act and Section 7 of the Clayton Act.
In their joint agreement, the companies have terminated their merger agreement and agreed with the Department of Justice to dismiss the litigation related to the proposed transaction. The proposed transaction was first announced on January 13, 2020.
At the time of this announcement, Al Kelly, Chairman and CEO of Visa Inc. said –
“We are confident we would have prevailed in court as Plaid’s capabilities are complementary to Visa’s, not competitive. We believe the combination of Visa with Plaid would have delivered significant benefits, including greater innovation for developers, financial institutions and consumers. 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.”
Mr. Kelly added, “We are focused on accelerating our business by advancing our broader strategy and continuing to drive Visa’s three growth pillars: consumer payments, new flows, and value-added services. We have great momentum to build upon. Over the past year, our Visa Direct solution moved money around the world using multiple card, ACH and RTP networks, growing nearly 70 percent. In addition, our value-added services revenue has grown in the mid-to-high-teens. We have great respect for Plaid and the business they have built and look forward to our continued partnership.”
“This past year saw an unprecedented uptick in demand for the services powered by Plaid, and our priority is to support the hundreds of millions of people who now rely on fintech,” said Zach Perret, CEO and co-founder of Plaid.
Zach added, “We made great strides last year, growing our customers by more than sixty percent and adding hundreds of banks to our platform. While Plaid and Visa would have been a great combination, we have decided to instead work with Visa as an investor and partner so we can fully focus on building the infrastructure to support fintech.“
The decision to end the deal could benefit Plain the new COVID-ecosystem, especially when the DOJ itself considers to be a global fintech giant in the current context.
Plaid is a data network that powers the fintech tools millions of people rely on to live healthier financial lives. Plaid works with thousands of fintech companies like Venmo, SoFi, and Betterment, several of the Fortune 500, and many of the largest banks to make it easy for people to connect their financial accounts to the apps and services they want to use. Plaid’s network covers 11,000 financial institutions across the US, Canada, UK and Europe. Headquartered in San Francisco, the company was founded in 2013 by Zach Perret and William Hockey.