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

AllWork Raises $4.9 Million From FINTOP Capital 

A FinTech focused on freelancer payroll has closed a significant early-round investment. This week, AllWork announced that it had raised a $4.8 million round. The Series A was led by Nashville-based FINTOP Capital with no other participants. As a result of the transaction, FINTOP's Chris Haley and Rick Holton will join AllWork's board of directors. Previously, AllWork closed a $3.8 million seed round in 2019, bringing their to-date funding total to $8.7...

Top 10 Personal Finance Articles of the Month — November 2022 

It’s time again for one of my favorite features here on Dyer News: a look at the top 10 personal finance articles of the month. Up first, we'll look at money in modern times and how inflation is impacting investments. Then, we'll look at some financial considerations. And finally we'll talk about simple pleasures, donating points and miles, and more. As usual, this month’s list includes a couple of Dyer...

U.S. Economy Added 263,000 Jobs in November 2022

Over the past several months, the United States economy has repeatedly offered mixed signals. Although gross domestic product results would suggest we're headed for a recession, the Federal Reserve has been forced to hike interest rates in a bid to slow inflation. Now, the latest figures also show that the economy continues to create jobs at a decent clip. According to the latest Bureau of Labor Statistics report, the U.S....