Visa pays $5.3 billion to share in fintech growth
The premium price for its acquisition of Plaid shows Visa’s determination not to be left behind in the fintech-led transformation gathering pace across financial services.
Visa proposes to pay $5.3 billion for Plaid, a company established only in 2013 that enables consumers to securely connect their accounts at incumbent banks to fintech apps – such as Venmo, TransferWise, Betterment, Acorns and many others – through which they manage their finances away from traditional banks.
It is a telling sign of the transformation of financial services that a leader such as Visa should offer such a sum for a young company that investors valued at just $2.4 billion pre-money during its last venture funding round, completed only 13 months ago in December 2018.
Announcing the acquisition agreement on Monday, Alfred Kelly, chairman and chief executive of Visa, acknowledged the speed with which fintechs are unbundling and repackaging financial services and transforming payments, funds movement and savings and investments.
“In 2019, 75% of the world’s internet users used at least one fintech application,” says Kelly.
A company such as Visa, renowned for the technology behind credit and debit cards serving tens of thousands of banks and millions of merchants, cannot afford to be left behind and needs to position itself to serve fintech developers for non-card payments.