Visa Inc. has signed a definitive agreement to acquire Plaid, a network that makes it easy for people to securely connect their financial accounts to the apps they use to manage their financial lives.
Visa will pay total purchase consideration of $5.3 billion to acquire Plaid.
Plaid’s products enable consumers to conveniently share their financial information with thousands of apps and services such as Acorns, Betterment, Chime, Transferwise and Venmo.
Consumers rely on these apps and services to help plan their spending, increase their savings and monitor their investments.
For example, when a user sets up a Venmo account, it is Plaid that enables the user to link their bank account to their Venmo account.
Connectivity between financial institutions and developers has become increasingly important to facilitate consumers’ ability to use fintech applications.
Plaid’s Significant Role in Money Movement
75 percent of the world’s internet-enabled consumers used a fintech application to initiate money movement in 2019 versus 18 percent in 2015.
Plaid has been a leader in enabling this connectivity at scale.
Today, one in four people with a U.S. bank account have used Plaid to connect to more than 2,600 fintech developers across more than 11,000 financial institutions.
“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business. Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers.”
Al Kelly, CEO and Chairman, Visa
Visa’s acquisition of Plaid represents both an entry into new businesses and complementary enhancements to Visa’s existing business.
First, Plaid’s fintech-centric business opens new market opportunities for Visa both in the U.S. and internationally.
Second, the combination of Visa and Plaid provides the opportunity to deliver enhanced payment capabilities and related value-added services to fintech developers.
Finally, the acquisition will enable Visa to work more closely with fintechs through all stages of their development and drive growth in Visa’s core business.
Once closed, the combination of Visa and Plaid is expected to provide significant benefits to developers, financial institutions and consumers.
The transaction 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.
This transaction will have no impact on Visa’s previously announced stock buyback program or dividend policy.
The transaction is expected to close in the next three to six months.
How is Visa’s new acquisition going to benefit your business?
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