FinTech: Visa Snaps Up Fintech Network Plaid for $5.3 Billion
Plaid allows people to connect their finances to apps.
Fintech applications need to connect up with a user’s financial accounts to deliver true benefits of immediate updation and convenience. For example, a Venmo user can make and share payments with contacts, make purchases and transfer money to their bank. Plaid is the network that provides the linkage between Venmo and the user’s bank account. Now, Visa will pay $5.3 billion for Plaid.
Visa’s acquisition: The importance of being Plaid
It’s a dramatic statistic. Nearly 75% of the world’s internet-enabled consumers used a fintech application to initiate money movement in 2019. This compares with just 18% in 2015. Plaid played a dominant role in enabling these fintech apps to link up with the traditional banking system.
“Plaid is a leader in the fast-growing fintech world with best-in-class capabilities and talent,” said Al Kelly, CEO, and Chairman of Visa. “The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers.”
Meanwhile, Visa will fund the acquisition from internal cash and borrowings if required.
“Plaid’s mission is to make money easier for everyone, and we are excited for this opportunity to continue delivering on that promise at a global scale,” said Zach Perret, CEO and co-founder of Plaid. “Together the two companies can support the rapid growth of digital financial services.”
Impact on Visa’s business
Plaid’s networking with fintechs across the globe opens up new market opportunities for Visa. Furthermore, fintech developers can now add enhanced payment capabilities and value-added services into apps that can run across both Plaid and Visa systems. The deal will also boost Visa’s interactions with developers and drive further growth in the company’s business.
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