Visa just spent $5.3 billion to acquire Plaid, the fintech company with an API that enables services for Venmo and other banking apps. Plaid's software allows startups, like the mobile investing app Robinhood and the cryptocurrency exchanges Coinbase and Gemini, to securely connect to users' bank accounts. According to Visa, one in four people with a US bank account have used Plaid's technology.
Plaid plans to remain an independent business unit, but will "lean" on the Visa brand, resources and international footprint. "We were very impressed by the Visa team from the minute they approached us," Plaid CEO and co-founder Zach Perret wrote in a blog post. "They share our vision for the future of financial services and have deep respect for the developer community we support."
For Visa, the deal opens new market and product opportunities. Visa's partners will likely benefit, too, and the company says it hopes to work more closely with fintechs through all stages of their development.
"We have strong relationships with both Visa and Plaid," said PayPal President and CEO Dan Schulman. "The combination of Plaid's capabilities with the security and scale of Visa's global network will provide us with exciting opportunities to enhance our products."
Visa was an early investor in Plaid, which also received investments from Mastercard, Goldman Sachs, Citi and American Express. According to Visa, 75 percent of the world's "internet-enabled" consumers used a fintech application to move money in 2019. That's up from just 18 percent in 2015, and the percentage will undoubtedly grow as mobile banking and cryptocurrencies become more popular.