Visa is to acquire one of its portfolio companies, financial data network operator Plaid, in multi-billion-dollar transaction, which comes only four months after its latest commitment to the company along with its peer Mastercard.
US-based financial data network operator Plaid agreed to a $5.3bn acquisition by one of its corporate backers, payment services company Visa. The transaction will give an exit to other corporate backers, including Visa’s peers Mastercard and American Express, financial services firm Citi and internet conglomerate Alphabet. Visa plans to expand its services and access through the transaction, broadening its reach across the financial services space. It is noteworthy that the news came only four months after Visa and peer Mastercard had invested an undisclosed amount in Plaid in September 2019.
Founded in 2013, Plaid has developed a technology which allows users to transfer their data to third-party financial technology platforms. When a customer opens an account with a finance management platform, Plaid’s software enables them to link their bank account to the app for convenience. Plaid’s software supports some 2,600 fintech developers.
Visa’s backing of the company prior to the acquisition was one of the many deals in which the corporate has been involved within the dynamic fintech space, as illustrated by the bubble chart below by GCV Analytics. Many of the developments in the burgeoning fintech space have disruptive potential for the payment processing business of incumbents like Visa and thus are of strategic importance. The sheer size of the acquisition underlies the importance of data, corroborating that data are the most valuable currency in today’s digitised world.
