Visa Inc. (NYSE: V) and Plaid have terminated their merger agreement and agreed with the Department of Justice to dismiss the litigation related to the proposed transaction.
The proposed transaction was first announced on January 13, 2020. Visa Inc. (NYSE: V) planned to acquire Plaid, a San Francisco, CA-based network that allows people to securely connect their financial accounts to the apps they use to manage their financial lives, for $5.3 billion.
Commenting on the announcement, Kelly, Chairman and CEO of Visa, said: “We believe the combination of Visa with Plaid would have delivered significant benefits, including greater innovation for developers, financial institutions and consumers. However, it has been a full year since we first announced our intent to acquire Plaid, and protracted and complex litigation will likely take substantial time to fully resolve.“
Mr. Kelly added, “We are focused on accelerating our business by advancing our broader strategy and continuing to drive Visa’s three growth pillars: consumer payments, new flows, and value added services. We have great momentum to build upon. Over the past year, our Visa Direct solution moved money around the world using multiple card, ACH and RTP networks, growing nearly 70 percent. In addition, our value added services revenue has grown in the mid-to-high-teens. We have great respect for Plaid and the business they have built and look forward to our continued partnership.“
Zach Perret, CEO and co-founder of Plaid, said: “We made great strides last year, growing our customers by more than sixty percent and adding hundreds of banks to our platform. While Plaid and Visa would have been a great combination, we have decided to instead work with Visa as an investor and partner so we can fully focus on building the infrastructure to support fintech.“
Founded in 2013 by Zach Perret and William Hockey, Plaid works with thousands of fintech companies like Venmo, SoFi, and Betterment, several of the Fortune 500, and many of the largest banks to make it easy for people to connect their financial accounts to the apps and services they want to use. Its network covers 11,000 financial institutions across the US, Canada, UK and Europe.