Visa Drops Plans to be able to Acquire Fintech Startup Plaid After DOJ Antitrust Lawsuit

Visa as well as fintech startup Plaid ditched plans for a $5.3 billion merger Tuesday after a Department of Justice antitrust lawsuit had threatened to block the deal.

Visa CEO Al Kelly said in a statement he thinks the business enterprises will have prevailed in court, but complex and “protracted litigation will likely take sizable time to totally resolve.”

Antitrust regulators argued Visa’s acquisition of Plaid would eliminate a nascent competitor offering a “lower-cost alternative for internet debit payments” and “deprive American merchants as well as buyers of this innovative way to Visa and boost entry barriers for future innovators.”

Plaid has noticed a major uptick in need during the pandemic, although the company was in a good position for a merger a season ago, Plaid decided to be an impartial company in the wake of the lawsuit.

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“While Visa and Plaid will have been an excellent combination, we have made the decision to instead work with Visa as an investor and partner so we can fully give attention to establishing the infrastructure to support fintech,” Plaid CEO Zach Perret said in a statement.

Plaid is actually a San Francisco fintech upstart used by well known financial apps as Venmo, Square Cash along with Robinhood to associate users to their bank accounts. One major reason Visa was serious about purchasing Plaid was accessing the app’s growing subscriber base and promote them more services. Over the previous year, Plaid claims it’s grown its customer base to 4,000 firms, up 60 % from a season ago.

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