Credit card giant Visa is acquiring Plaid, San Francisco-based company that focuses on democratizing financial services through technology. The sum of the acquisition made up .3 billion, which is twice as much as Plaid’s valuation in 2018.We’re incredibly excited to share that Plaid is joining @Visa!Together, we’re looking forward to expanding our products for developers and connecting consumers with the fintech services that are making money easier for everyone. More details here.https://t.co/2DfsHVJ3JX— Plaid (@Plaid) January 13, 2020According to the press release, the deal will bring benefits to both the companies. As for Visa, it will get access to new market opportunities, attract more clients, and work more closely with fin-techs at all stages of their development. Besides, Visa
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Credit card giant Visa is acquiring Plaid, San Francisco-based company that focuses on democratizing financial services through technology. The sum of the acquisition made up $5.3 billion, which is twice as much as Plaid’s valuation in 2018.
We’re incredibly excited to share that Plaid is joining @Visa!
Together, we’re looking forward to expanding our products for developers and connecting consumers with the fintech services that are making money easier for everyone. More details here.https://t.co/2DfsHVJ3JX
— Plaid (@Plaid) January 13, 2020
According to the press release, the deal will bring benefits to both the companies. As for Visa, it will get access to new market opportunities, attract more clients, and work more closely with fin-techs at all stages of their development. Besides, Visa will be able to provide services to users of the most popular fin-tech apps, as Plaid has been working with Venmo, Square Cash, Chime, Acorns, Robinhood, and Coinbase.
Visa CEO and chairman Al Kelly stated:
“The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers.”
Moreover, the deal may add 100 basis points to the company’s net revenue growth by 2021.
As far as Plaid is concerned, working with Visa will add to the company’s popularity. In addition, it will enhance the development of Plaid products.
The companies are expecting to close the deal in the next three to six months.
Community Response to the Deal
The news that Visa is acquiring Plaid has received mostly positive feedback.
For example, Gordon Smith, co-president, JPMorgan Chase and CEO of Consumer and Community Banking, stated:
“We believe Visa’s acquisition of Plaid is an important development in giving consumers more security and control over how their financial data is used. Protecting customer data and helping them share that information safely has long been a top priority for Chase. We look forward to partnering with Visa to continue building a great experience for our shared customers.”
PayPal CEO Dan Schulman provided a comment as well:
“We have strong relationships with both Visa and Plaid. The combination of Plaid’s capabilities with the security and scale of Visa’s global network will provide us with exciting opportunities to enhance our products.”
It is notable that the deal is subject to regulatory approvals and other customary closing conditions. Visa will fund the transaction from cash on hand and debt issuance at the appropriate time. According to Visa, it ‘will have no impact on Visa’s previously announced stock buyback program or dividend policy.’
More Details about Plaid
Plaid is a fin-tech company that connects applications with users’ bank accounts. The company started its activity by building the technical infrastructure APIs to connect consumers, traditional financial institutions, and developers.
In January 2019, Plaid made its first milestone acquisition. The company bought a rival firm Quovo. As we reported at that time, the deal cost $200 million.
Earlier, Plaid conducted several funding rounds. After the latest round C, Plaid hit a whopping $2.65 billion valuation. Besides, one of the major investors at that time was Visa. Therefore, the current acquisition is not much surprising.
Since round C, Plaid has expanded its staff from 175 to 300 people. However, the company will not stop. It has further ambitious plans that we will hopefully see lived up very soon.
Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.