By Adedapo Adesanya
Top financial service company, Visa Incorporated, has announced that it plans to acquire financial platform, Plaid, in a deal believed to worth about $5.3 billion.
The acquisition will see Visa become the owners of Plaid, a network that is used to securely connect financial accounts used to manage its financial lives. Already, both parties have signed a definitive agreement.
Speaking on the acquisition of the service, Chief Executive Officer (CEO) and chairman of Visa, Mr Al Kelly, stated that, “We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business.”
“Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers,” he noted.
“This acquisition is the natural evolution of Visa’s 60-year journey from safely and securely connecting buyers and sellers to connecting consumers with digital financial services,” he added.
“The combination of Visa and Plaid will put us at the epicenter of the fintech world, expanding our total addressable market and accelerating our long-term revenue growth trajectory,” Mr Kelly said further.
On the part of the acquired company, Co-founder and CEO, Plaid, Mr Zach Perret said that the deal will make sure that service operates at a global level.
“Plaid’s mission is to make money easier for everyone, and we are excited for this opportunity to continue delivering on that promise at a global scale.
“Visa is trusted by billions of consumers, businesses and financial institutions as a key part of the financial ecosystem, and together Visa and Plaid can support the rapid growth of digital financial services,” he said.
In a world where connectivity between financial institutions and developers are increasing, the Visa’s acquisition of Plaid represents both an entry into new businesses and complementary enhancements to Visa’s existing business.
According to market analysts, Plaid’s fintech-centric business will open new market opportunities for Visa both in the US and internationally and also, the combination of both parties provides the opportunity to deliver enhanced payment capabilities and related value-added services to fintech developers.
It is also believed that the acquisition will enable Visa to work more closely with fintechs through all stages of their development and drive growth in Visa’s core business.
Once the deal is closed within the next three to six months, the combination of Visa and Plaid is expected to provide significant benefits to developers, financial institutions and consumers which will enable companies enhance their global services while protecting important financial data.
The transaction is however subjected to regulatory approvals and other customary closing conditions. Visa will fund the transaction from cash on hand and debt issuance at the appropriate time. This transaction will have no impact on Visa’s previously announced stock buyback program or dividend policy.
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