Payments behemoth Visa acquired financial technology firm Plaid for $5.3 billion, according to a press release published on Jan. 13.
Per the release, Plaid has developed a network that allows users to easily connect their financial accounts to the apps they use to manage their financial lives.
The firm’s products reportedly allow for convenient sharing of financial information with thousands of apps and services by allowing users to link various accounts.
The announcement states that 75% of the world’s internet-enabled consumers used a fintech application for moving funds. As such, it has “become increasingly important to facilitate consumers’ ability to use fintech applications.” Visa Chairman and CEO Al Kelly commented:
“Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers.”
Visa’s interest in innovation
Visa hopes that the acquisition will enable it to work more closely with financial technology firms. Kelly explained that Plaid’s acquisition transitions Visa from connecting buyers and sellers to connecting consumers with fintech services.
The acquisition is still subject to regulatory and customary closing conditions and will have no impact on Visa’s previously announced stock buyback program or dividend policy. The deal is expected to close in the next three to six months.
Visa has shown an active interest in innovations in the fintech sector. In October, Kelly said that the company is still in discussions with Facebook regarding Libra, despite pressure on the project from regulators globally.
In late September, Visa announced that it partnered with the United Kingdom-based digital banking app Revolut. The partnership allowed Revolut to roll out its product in new jurisdictions including Australia, Brazil, Canada, Japan, New Zealand, Russia, Singapore and the United States.