SAN FRANCISCO—Visa Inc. announced Tuesday that it has scrapped its planned acquisition of fintech startup Plaid and agreed with the U.S. Department of Justice to dismiss litigation related to the deal. Plans for the merger were first announced in January 2020.
Al Kelly, Visa chairman and CEO, said the credit card giant is “confident we would have prevailed in court as Plaid’s capabilities are complementary to Visa’s, not competitive.”
The Justice Department in November filed a civil antitrust suit against Visa seeking to block the $5.3 billion deal, saying “the acquisition would deprive American merchants and consumers of this innovative alternative to Visa and increase entry barriers for future innovators.”
In a statement Tuesday, Makan Delrahim, assistant attorney general for antitrust, said, “Now that Visa has abandoned its anticompetitive merger, Plaid and other future fintech innovators are free to develop potential alternatives to Visa’s online debit services.”
NACS had urged DOJ to bar Visa’s acquisition of Plaid.
“More competition and innovation in the payments industry is good for businesses of all types and the U.S. economy as a whole,” said Anna Ready Blom, NACS director of government relations. “NACS appreciates the Justice Department’s willingness to take a strong and successful position against Visa’s effort to snuff out the promise of a young, innovative company like Plaid. The potential for a more competitive payments market is a little better today than it was yesterday.”
Visa’s Kelly said that he looks forward to a continued partnership with Plaid.
“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,” Zach Perret, Plaid CEO and co-founder, said.