UK watchdog green lights $5.3bn Visa-Plaid deal
The Competition and Markets Authority (CMA) has given Visa’s acquisition of Plaid a green light following an investigation.
Visa announced in January 2020 that it had agreed to buy Plaid in a deal worth $5.3 billion. The figure is roughly double Plaid’s private valuation of $2.65 billion.
The Californian fintech provides APIs to initiate payments between bank accounts and third parties like Venmo, Square Cash, and Robinhood.
The CMA’s investigation primarily focused on how the deal could affect competition in the UK consumer-to-business electronic payments sector.
It found that Plaid “would have been an increasing competitive threat” to Visa in future, but that it is only one of several payment initiation service (PIS) providers already active in the UK.
On that finding the CMA says that there remains competition from PIS providers even after the Visa-Plaid integration.
The regulator also considered whether Visa could “leverage its strong position in card-based payments to drive Plaid’s rivals out of the market”.
Yet it decided that customers often use multiple suppliers for their payments needs. Other providers could challenge Visa through their own mergers or partnerships.
Visa said in January that it planned to close the acquisition “within three to six months”.