Plaid, an open banking platform, announced on Tuesday it has decided to terminate its pending acquisition by Visa and will remain an independent company. The latest news on the acquisition was made just a little over two months after it was revealed that the U.S. Department of Justice has filed suit in federal court pertaining to the acquisition.
As previously reported, Visa announced in January 2020 it was planning to acquire Plaid for $5.3 billion. In purchasing Plaid, Visa was reportedly to jumpstart its push for digital prominence. Kelly called the acquisition a “natural evolution” as it connects consumers with digital financial services. At the time Al Kelly, CEO and Chairman of Visa, stated:
“The combination of Visa and Plaid will put us at the epicenter of the Fintech world, expanding our total addressable market and accelerating our long-term revenue growth trajectory.”
At the time of the lawsuit’s announcements, Visa refuted the suit:
“Visa strongly disagrees with the Department of Justice (DOJ), whose attempt to block Visa’s acquisition of Plaid is legally flawed and contradicted by the facts. This action reflects a lack of understanding of Plaid’s business and the highly competitive payments landscape in which Visa operates. The combination of Visa and Plaid will deliver substantial benefits for consumers seeking accessto a broader rangeof financial-related services, and Visa intends to defend the transaction vigorously. As we explained to the DOJ, Plaid is not a payments company. Visa’s business faces intense competition from a variety of players – but Plaid is not one of them. Plaid is a data network that enables individuals to connect their financial accounts to the apps and services they use to manage their financial lives, and its capabilities complement Visa’s. Together, Visa and Plaid will deliver better digital experiences and more choice for consumers in managing their money and financial data. Visa is confident that this transaction is good for consumers and good for competition.”
Speaking about Plaid remaining an independent company, Zachary Perret, Co-Founder and CEO of Plaid, shared:
“Since founding Plaid 8 years ago, we have been maniacally focused on expanding access and improving financial outcomes for consumers, developers, and financial institutions – and the intent of joining Visa was to accelerate that work. Unfortunately, the pace of a multi-year regulatory review is not compatible with the fast-moving realities of a startup – and delaying close another year or more is not in the best interest of our customers, the financial system, or consumers themselves.”
Perret further revealed despite the struggles that happened in 2020 globally, the past year has been one of exciting growth for Plaid, with hundreds of new banks joined the Plaid platform, and more than 4,000 companies turned to the platform’s service as the infrastructure to support their businesses, including many of the largest Fortune 500 companies who are focused on bringing digital financial products to their customers. In regards to his 2021 predicts, Perret added he expects the year to be more of the same as 2020.
“In addition to our ongoing focus on helping companies of all sizes deliver digital financial products, we have made significant progress in the ways that we work with financial institutions. Delivering on the promise of open finance is in everyone’s best interest, and we’ll be working in lockstep with our customers and financial institutions to bring this to fruition globally.”
“For the first time ever on the app, Curve customers will be able to gather all their cards, see and spend their money in the same place. Plaid’s technology will enable Curve customers to connect their payment accounts at nearly all financial institutions in the UK, in addition to the cards they’ve linked.”