The deal is expected to close in the next three to six months, subject to the usual regulatory approvals.
The deal is worth $5.3 billion, the companies said.
And if the acquisition pushes through, Visa, with the network it has, serving millions of customers in 200 countries, could easily propel Plaid to instant success, which is why the revenue the startup earns isn't a point of contention for Visa, Jeff Kauflin of Forbes noted.More news: 49ers, Chiefs Each 7.5-Point Favorites In Conference Championship Game
"We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business". The exchange uses Plaid to link its users' bank accounts and to flag fraud on its trading platform. FinTech company Global Payments and TSYS made a $21.5 billion merger agreement in May 2019. After the deal, Visa is looking forward to accelerating revenue growth and new business opportunities. It also said about 25 percent of USA bank accounts have used Plaid to connect to more than 2,600 fintech developers.
Visa is buying Plaid for 2 reasons.
On Visa's evolution, Kelly referenced the company's 60-year transformation from "safely and securely connecting buyers and sellers to connecting consumers with digital financial services". Rather than merely connect payment industry players when someone wishes to make a card purchase, Visa is trying to tap into newer financial-technology experiences, including by providing a suite of services to developers.
In Visa's view, the fintech world's growth is "very high".More news: 'Living robot' developed by scientists using frog embryos
At the same time, many FinTech apps, which are customers for both Visa and Plaid, have come up with louder appraisal for this acquisition. The acquisition will not have any effect on Visa's earlier announced stock repurchase program or dividend guidelines.
Plaid provides the plumbing for Venmo, the fintech app from PayPal Holdings Inc. Moreover, the company's development tools are interoperable with more than 11,000 financial institutions.
Plaid co-founder Zach Perret will stay on to run the company.More news: Big Ben won't bong for Brexit