Visa Calls off $5.3B Plaid Acquisition over Antitrust Concerns
- The DoJ moved to court to block the multi-billion dollar deal.
Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term giant Visa has called off its decision to acquire fintech startup, Plaid for $5.3 billion following the backlash it faced over antitrust concerns from the US regulators, the companies officially announced on Tuesday.
Plaid offers technical infrastructure APIs that connect consumers, traditional financial institutions and developers. It claims to have more than 200 million consumer accounts with 11,000 banks.
Visa and Plaid agreed on a merger deal in January last year as the former was expecting to gain greater access to the growing financial technology space. However, this deal alarmed the US regulators over Visa’s monopoly on the payments industry.
Facing the Regulatory Wrath
Additionally, the US Department of Justice moved to court against the possible deal and sued Visa to block the acquisition. The allegations were primarily based on the Visa Chief, Al Kelly’s previous statements, who saw the deal as an “insurance policy to protect their important US debit business.”
Moreover, he stated that the deal was strategic and not a financial one.
In its lawsuit, the justice department alleged that the multi-billion dollar acquisition deal would allow Visa to maintain its monopoly in the payments market and will also allow it to set super competitive prices in online debit.
Confirming the termination of the deal, Kelly said: “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.”
Meanwhile, Plaid is facing a couple of other class-action lawsuits, which alleges its role in the violation of user data privacy by selling data to third-parties. One of the lawsuits even alleged that Plaid is offering Visa a large amount of data as a part of the acquisition deal. However, the Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term publically denied all the allegations.
Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term giant Visa has called off its decision to acquire fintech startup, Plaid for $5.3 billion following the backlash it faced over antitrust concerns from the US regulators, the companies officially announced on Tuesday.
Plaid offers technical infrastructure APIs that connect consumers, traditional financial institutions and developers. It claims to have more than 200 million consumer accounts with 11,000 banks.
Visa and Plaid agreed on a merger deal in January last year as the former was expecting to gain greater access to the growing financial technology space. However, this deal alarmed the US regulators over Visa’s monopoly on the payments industry.
Facing the Regulatory Wrath
Additionally, the US Department of Justice moved to court against the possible deal and sued Visa to block the acquisition. The allegations were primarily based on the Visa Chief, Al Kelly’s previous statements, who saw the deal as an “insurance policy to protect their important US debit business.”
Moreover, he stated that the deal was strategic and not a financial one.
In its lawsuit, the justice department alleged that the multi-billion dollar acquisition deal would allow Visa to maintain its monopoly in the payments market and will also allow it to set super competitive prices in online debit.
Confirming the termination of the deal, Kelly said: “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.”
Meanwhile, Plaid is facing a couple of other class-action lawsuits, which alleges its role in the violation of user data privacy by selling data to third-parties. One of the lawsuits even alleged that Plaid is offering Visa a large amount of data as a part of the acquisition deal. However, the Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term publically denied all the allegations.