Visa as well as fintech startup Plaid ditched plans for a $5.3 billion merger Tuesday after a Department of Justice antitrust lawsuit had threatened to block the deal.
Visa CEO Al Kelly said in a statement he believes the companies will have prevailed in court, but complex and “protracted litigation will likely take sizable time to totally resolve.”
Antitrust regulators argued Visa’s acquisition of Plaid would eliminate a nascent competitor offering a “lower cost alternative for internet debit payments” and “deprive American merchants and buyers of this innovative way to Visa and improve entry barriers for future innovators.”
Plaid has noticed a big uptick in need throughout the pandemic, and while the company was in an inexpensive position for a merger a season ago, Plaid decided to be an independent organization in the wake of the lawsuit.
“While Visa and Plaid will have been an effective combination, we’ve made the decision to instead work with Visa as an investor and partner so we are able to fully concentrate on creating the infrastructure to help fintech,” Plaid CEO Zach Perret said in a statement.
Plaid is a San Francisco fintech upstart used by popular monetary apps as Venmo, Robinhood and Square Cash to associate users to the bank accounts of theirs. One key reason Visa was interested in buying Plaid was to access the app’s growing client base and promote them more services. Over the older year, Plaid states it has developed its customer base to 4,000 firms, up sixty % from a season ago.