Visa “is essentially buying access to another network' it can connect to, one analyst says.
Visa Inc. V, +0.81% announced Monday afternoon that it plans to acquire financial-technology upstart Plaid for $5.3 billion, including $4.9 billion of cash consideration and the rest in retention equity and deferred equity. Plaid, valued at about $2.65 billion in a late 2018 private funding round, allows individuals to connect their bank accounts with newer fintech platforms including Mint, Acorns, PayPal Holdings Inc.’s PYPL, +2.08% Venmo and Betterment.
The company is “increasingly trying to move from being strictly focused on payments to being focused on the movement of funds for any purpose,” according to its conference call following the deal announcement. Visa calls Plaid “the leading financial data network in the United States.” “This will help further reduce the company’s dependence on the traditional transactional model,” Wedbush analyst Moshe Katri said in an email to MarketWatch.
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