Visa, Plaid $5,3bn merger fail amid antitrust concerns

Photo: AP

The long-expected merger of two leading payment-processing companies has stalled due to antitrust concerns, AP reported. The $5,3 billion deal between Visa and Plaid has been called off, Visa said the company cited, US Justice Department’s antitrust lawsuit filed last year to block the deal.

Plaid provides the infrastructure that allows consumers and businesses to make payments directly from their bank accounts. Services like Venmo, SoFi, Stripe and TransferWise all use Plaid as a way for consumers to send money from their bank accounts to another party without having to use the debit-card infrastructure that’s largely controlled by Visa and its major competitor Mastercard.

After Visa’s announcement that it intended to buy Plaid, politicians and antitrust experts noted that the deal would give Visa more power over how customers and businesses pay for goods and services. The Justice Department’s lawsuit argued, among things, that the deal would allow Visa to “maintain its monopoly position and supracompetitive prices in online debit.”

In a statement, Visa said it still believes the deal between the two San Francisco-based companies would have benefited consumers, financial institutions and developers but that it decided to scrap it to avoid an extended court battle. “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,” Visa’s CEO Al Kelly said in a statement.

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