Visa and Plaid have called off their $5.3bn deal after an antitrust lawsuit threatened to scupper the deal.
Visa announced it was buying the fintech this time last year in one of the biggest fintech deals ever. But on Tuesday both parties announced they had agreed to mutually end the agreement after regulatory opposition.
In November the Department of Justice filed an antitrust lawsuit stating Visa is a “monopolist in online debt transactions”, and the acquisition would “eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers”.
Plaid, which helps companies connect to users’ bank accounts, claims to have had an “unprecedented uptick in demand” amid the pandemic.
Since launching in 2013, the fintech has grown to hold connections with 10,000 banks and reach more than 20m consumer bank accounts.
In a statement on Monday Visa chief executive Al Kelly said he believed the companies would have prevailed in court, but “protracted and complex litigation will likely take substantial time to fully resolve”.
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But the relationship between the two is not over just yet.
Plaid chief executive and founder Zach Perret said: “While Plaid and Visa would have been a great combination, we have decided to instead work with Visa as an investor and partner so we can fully focus on building the infrastructure to support fintech.”