Visa buys startup online payments Plaid for US $ 5.3 billion. The fintech based in San Francisco. Partnerships between traditional financial institutions and developers becomes increasingly important.

The US multinational financial services Visa signed an agreement to acquire the startup of online payments Plaid, which has among its customers the popular mobile application Venmo, in exchange for US $ 5.3 billion.

Based in San Francisco (California, United States), Plaid is a provider of application programming interfaces (APIs) for digital payment systems, that is, they make possible transactions between bank accounts of Internet users and companies in the ones they want to buy.

Visa buys startup online payments Plaid

"Plaid products allow consumers to conveniently share their financial information with thousands of applications such as Acorns, Betterment, Chime, Transferwise and Venmo," both companies said in announcing the agreement.

In the case of Venmo, probably the best known Plaid client for the general public in the US, the API developed by Plaid is the one that connects the user's bank account with their Venmo account, thus allowing simple and fast transactions such as payments or income.

Connectivity between financial institutions and developers has become increasingly important to facilitate the ability of consumers to use applications from fintechs (financial technology companies). 75% of consumers who use the Internet in the world used an application developed by a fintech to initiate money movements in 2019, compared with 18% in 2015. Plaid has been a leader in enabling this connectivity at scale. Today, one in four people with a bank account in the United States has used Plaid to connect more than 2,600 fintechs applications with more than 11,000 financial institutions.

"We are very excited about the acquisition of Plaid and how it increases the growth trajectory of our business," said Al Kelly, CEO and president of the Visa board of directors. “Plaid is a leader in the fintech world, of fast growth, with capacities and talent of first level. The acquisition, combined with our multiple efforts already aimed at fintechs, will position Visa to provide even more value to developers, financial institutions and consumers. ”

The San Francisco firm was founded in 2013 and has since grown to serve twenty million people through its bank accounts and the various applications it has as clients.

The acquisition of Plaid by Visa represents at the same time an entry to new businesses and complementary improvements to the current Visa business. First, Plaid's fintechs-focused business opens up new market opportunities for Visa both in the United States and internationally. Second, the combination of Visa and Plaid creates the opportunity to provide enhanced payment capabilities and value-added services related to fintech developers. Finally, the acquisition will allow Visa to work more closely with fintechs at all stages of its development and boost the growth of Visa's core business.

"This acquisition is a natural evolution in our 60-year history, from securely connecting buyers and sellers, to consumers with digital financial services," Kelly said. "The combination of Visa and Plaid puts us at the epicenter of the fintech world, expanding our total potential market and accelerating our long-term revenue growth trajectory," he added.