Visa announced this week that it will acquire Plaid, a financial technology startup that enables users to interact with their bank accounts through applications. The deal is valued at $5.3 billion.
Plaid’s products allow consumers to share financial information with apps and services such as Acorns, Betterment, Chime, Transferwise and Venmo.
“Consumers rely on these apps and services to help plan their spending, increase their savings and monitor their investments. For example, when a user sets up a Venmo account, it is Plaid that enables the user to link their bank account to their Venmo account,” Visa officials said in a statement on the deal.
Visa said it views the acquisition as both an entry into new businesses and that it adds complementary enhancements to Visa’s existing business. Plaid’s fintech-centric business opens new market opportunities for Visa both in the U.S. and internationally, officials said. And combination of Visa and Plaid gives them an opportunity to deliver enhanced payment capabilities and related value-added services to fintech developers. Visa said the move will also allow them to work more closely with fintechs through their development and drive growth in Visa’s core business.
Once closed, the combination of Visa and Plaid is expected to provide significant benefits to developers, financial institutions and consumers.
The transaction is expected to close in the next three to six months.