Visa, a global leader in digital payments, said it has signed an agreement to acquire Plaid, a financial technology start-up, for a total purchase consideration of $5.3 billion.
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. About 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,” said Al Kelly, CEO and chairman of Visa. “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.”
“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. “Visa is trusted by billions of consumers, businesses and financial institutions as a key part of the financial ecosystem, and together Visa and Plaid can support the rapid growth of digital financial services.”
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, Visa said in a statement.
Copyright 2022 Al Hilal Publishing and Marketing Group