Visa takeover of Plaid given the green light by UK regulators

The Competitions and Market Authority (CMA) has given the go-ahead for Visa’s planned takeover of US fintech Plaid.

Plaid’s acquisition was being investigated by the CMA after questions were raised that the deal could harm competition, despite Plaid being a “relatively small player in the UK,” by the CMA’s own admission. 

Plaid develops financial services APIs and helps developers share banking and other financial information, with one in four Americans having a bank account that connects with Plaid.

Founded in 2003, Plaid has since amassed over 20m bank accounts and integrated with 10,000 banks. 

In part of the investigation, the CMA found that “Plaid would have been an increasing competitive threat to Visa in the future,” but because of existing players in the UK market, such as the likes of Tink,TrueLayer,Token.io and Yapily, “Visa UK would continue to face sufficient competition after the merger.” 

Despite Plaid’s growing presence in the UK, the CMA decided that “customers often use multiple suppliers for their payment options.” 

Back in January 2020, Visa and Plaid announced that the payments giant planned to purchase the fintech for $5.3bn, roughly double Plaid’s private valuation of $2.65bn. 

The CMA’s decision further cements Visa’s push into the fintech sector, with the payments giant becoming a majority stakeholder in buy-now-pay-later Swedish fintech Klarna in 2017.