Reportedly, Visa Inc (V) has withdrawn from its $5.3 billion purchase of payment-processing technology company, Plaid following an antitrust pushback from the Department of Justice. The deal was proposed in January 2020.
Plaid’s infrastructure allows consumers and businesses to make payments directly from their bank accounts. Venmo, SoFi, Stripe, and TransferWise all use Plaid allowing consumers to send money from their bank accounts to a third party without a debit-card infrastructure which is largely managed and controlled by payment giant Visa and its competitor Mastercard. Politicians and antitrust experts argued the deal would give Visa even more power over how customers and businesses pay for goods and services.
The Justice Department’s lawsuit argued that the purchase would allow Visa to “maintain its monopoly position and supracompetitive prices in online debit. 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,” stated Visa’s CEO Al Kelly.
However, Visa reportedly continues to believe that the deal would have added benefits to consumers and financial institutions but decided to scrap the plan in order to avoid an extended court battle.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Their mission is to connect the world through the most innovative, reliable, and secure payment network – enabling individuals, businesses, and economies to thrive. Their advanced global processing network, VisaNet, provides secure and reliable payments around the world and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying its brand, products, people, network, and scale to reshape the future of commerce. To learn more about Visa (V) and to track its ongoing progress please visit the Vista Partners Visa (V) Coverage Page.)
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