Visa and Plaid's $5.3B acquisition deal has been called off following the U.S. Justice Department's antitrust lawsuit. The deal was announced in January last year before the pandemic, and the lawsuit was filed in November.
- Plaid offers banking-as-a-service through its API platform. Since the deal announcement, the company's revenue is expected to have increased by triple digits.
- Visa said that it sees Plaid as not being competitive but complementary to its offerings, and hence the deal would have prevailed despite the lawsuit. But, the deal has been called off due to complex litigations that could take years to solve.
- Plaid said that the company had added hundreds of banks to its customer base with an overall 60% growth last year. The company will continue to work with Visa as a partner.
- Mastercard's $825M acquisition of Finicity — a company similar to Plaid — was approved by the DoJ as Mastercard has less than 25% market share in the payment processing market.
- TechCrunch noted that the Visa-Plaid deal cancellation could affect the valuation of fintech startups and investments from VCs.