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 believes the business enterprises will have prevailed in court, but complex and “protracted litigation will likely take substantial time to fully resolve.”
Antitrust regulators argued Visa’s acquisition of Plaid would eliminate a nascent competitor offering a “lower-cost choice for online debit payments” and “deprive American merchants as well as customers of this revolutionary option to Visa and boost entry barriers for upcoming innovators.”
Plaid has seen a huge uptick in need during the pandemic, although the business enterprise was in an inexpensive position for a merger a season ago, Plaid chose to be an unbiased company in the wake of the lawsuit.
“While Plaid and Visa will have been a good combination, we’ve made the decision to instead work with Visa as an investor as well as partner so we are able to totally give attention to building the infrastructure to help fintech,” Plaid CEO Zach Perret said in a statement.
Plaid is a San Francisco fintech upstart used by popular monetary apps like Venmo, Robinhood along with Square Cash to link users to their bank accounts. One important reason Visa was serious about buying Plaid was accessing the app’s growing client base and sell them more services. Over the past year, Plaid claims it’s developed its customer base to 4,000 firms, up 60 % from a season ago.