Visa is penetrating the growing market for mobile payment services and has therefore announced its intention to acquire FinTech Plaid. The takeover will cost the payment service provider 5.3 billion US dollars.
Comfortably from home: The demand for online payment services is growing steadily. Now credit card giant Visa is increasingly penetrating the sector and has announced that it will take the FinTech Plaid under its wing. Plaid develops programming interfaces that link digital payment apps such as PayPals Venmo or Transferwise with bank accounts.
For the handsome sum of 5.3 billion US dollars, Visa is leasing the start-up, according to a press release dated 13 January. However, the takeover is not expected to be completed for the next three to six months. Before that, the supervisory authorities still have to give their approval.
Visa at the epicentre of the FinTech world
The acquisition opens up new payment processing opportunities for Visa in digital financial services. Via Plaid, users can connect their bank accounts with apps like Venmo from PayPal. Crypto providers such as Coinbase and Abra Wallet can also be used via the app.
Al Kelly, CEO of Visa, said “The combination of Visa and Plaid will put us at the epicenter of the FinTech world, expand our entire addressable market and accelerate our long-term revenue growth.”
Founded in 2012, the start-up company is enjoying increasing popularity. One in four people with a US bank account have already used Plaid, the official announcement says. The company is now affiliated with 11,000 banks and has access to around 20 million customer accounts.
Dan Schulman, CEO of PayPal, added “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”.
According to the Wall Street Journal, Plaid was valued at only $2.65 billion in a 2018 financing round. The fact that Visa is now putting twice that amount on the table can be interpreted as a long-term strategy to monopolize the mobile payment services market in the future.