Published: Tue, January 14, 2020
Economy | By

Visa Acquires Payment Tech Provider Plaid For Twice Its Valuation

Visa Acquires Payment Tech Provider Plaid For Twice Its Valuation

Visa is purchasing the financial technology company Plaid for $5.3 billion, a major push by the payment processing giant into other types of money transfer systems outside of Visa's traditional credit and debit card business.

Plaid focuses on enabling consumers and businesses to interact with their bank accounts, check balances, and make payments through financial technology applications.

Founded in 2013 and now connecting with over 11,000 financial institutions across the United States, Canada and Europe, Plaid will be able to use the acquisition to leverage Visa's global brand in expanding its own business, according to a source familiar with the matter.

Visa's shares closed 0.83% higher at $195.33 on Monday.

Visa was one of the companies that participated in the funding round, along with competitor Mastercard Inc.

"Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent". Kelly explained that Plaid's acquisition transitions Visa from connecting buyers and sellers to connecting consumers with fintech services. "The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers".

Visa expects the acquisition, which will close in three to six months pending regulatory approval, to increase the company's revenue and profits starting next fiscal year.

Previous investors in Plaid include the likes of Citi, Goldman Sachs and American Express.

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