Visa to Acquire FinTech Tool Plaid

Over the past few years, the FinTech Plaid has managed to make a name for itself not only with observers and investors but also with the millions of customers who use their product. At the same time many more have likely encountered Plaid and not even known it since it merely acts as a mediary between banks and various financial apps. Now it seems that we’ll soon know Plaid another way: as a part of Visa. That’s because, as CNBC reports, the credit card company has announced that it’ll acquire the startup for $5.3 billion.

As mentioned, Plaid’s technology powers a number of popular personal finance apps, allowing them to securely obtain “read-only” data from bank accounts such as balances and transactions. In fact in December Plaid revealed that 25% of Americans with bank accounts had connected them to Plaid.

Not only is the $5.3 billion Visa will reportedly pay for Plaid a massive number but is also nearly double what private valuations previously placed the company at. Plaid’s last funding round (a Series C) raised $250 million at a valuation of $2.7 billion. Interestingly, in addition to Visa being a prior investor in the firm, Mastercard, as well as a venture arm of American Express, have also put money into Plaid over the years.

In a blog post announcing the acquisition, Plaid co-founder and CEO Zach Perret wrote, “Joining forces with Visa, a brand that is trusted by billions of consumers, and financial institutions in over 200 countries and territories, represents an incredible opportunity to continue to scale our products. We’ll be able to lean on their brand, resources, and international footprint to benefit our customers, our partners, and the markets we serve.” Perret concluded his post saying “I could not be more excited for the future of Plaid, and the future of FinTech. Onwards!”

Meanwhile, in a call with investors, Visa CEO Al Kelly said that the acquisition was a long-term play. Kelly stated,  “This fits well, strategically. We’re excited about new businesses and the ability for this to accelerate our revenue growth over time.”

Visa’s purchase of Plaid does seem to be a win-win for both companies as well as a massive deal for FinTech at large. While it’s clear that a number of consumers already know and trust Plaid’s services, having the backing of a big name like Visa only stands to further that faith. In turn the numerous apps that rely on Plaid could see a boost as well, making this perhaps the biggest FinTech news of the still-young year so far.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...

Marqeta Expands Credit Program with New APIs and More

A FinTech that specializes in creating credit card experiences is rolling out some new features. This week, Marqeta announced what it calls a "significant expansion" of its credit platform. This includes more than 40 new credit APIs that will further help clients craft and launch their own credit card products. Additionally, the company notes an updated intuitive dashboard. Using this platform, businesses can create unique card options that can not...