Payments giant Visa has called off its decision to acquire fintech startup, Plaid for $5.3 billion following e backlash it faced over antitrust concerns from e US regulators, e companies officially announced on Tuesday.
Plaid offers technical infrastructure APIs at connect consumers, traditional financial institutions and developers. It claims to have more an 200 million consumer accounts wi 11,000 banks.
Visa and Plaid agreed on a merger deal in January last year as e former was expecting to gain greater access to e growing financial technology space. However, is deal alarmed e US regulators over Visa’s monopoly on e payments industry.
Facing e Regulatory Wra
Additionally, e US Department of Justice moved to court against e possible deal and sued Visa to block e acquisition. The allegations were primarily based on e Visa Chief, Al Kelly’s previous statements, who saw e deal as an “insurance policy to protect eir important US debit business.”
Moreover, he stated at e deal was strategic and not a financial one.
In its lawsuit, e justice department alleged at e multi-billion dollar acquisition deal would allow Visa to maintain its monopoly in e payments market and will also allow it to set super competitive prices in online debit.
Confirming e termination of e deal, Kelly said: “It has been a full year since we first announced our intent to acquire Plaid, and protracted and complex litigation will likely take substantial time to fully resolve.”
Meanwhile, Plaid is facing a couple of o er class-action lawsuits, which alleges its role in e violation of user data privacy by selling data to ird-parties. One of e lawsuits even alleged at Plaid is offering Visa a large amount of data as a part of e acquisition deal. However, e fintech publically denied all e allegations.