DOJ FILES SUIT TO BLOCK VISA ACQUISITION OF PLAID
Visa’s plans to acquire financial technology startup Plaid Inc. were thwarted yesterday when the US Justice Department filed an antitrust lawsuit. The DOJ contends that Plaid, that powers Paypal’s Venmo and other payment apps, competes with Visa, and that the $5.3 billion acquisition would create a monopoly in online debit leading to higher prices and discouraging industry innovation.
The US antitrust lawsuit to block Visa’s planned acquisition of Plaid alleges that Visa offered to pay a huge price for the tiny company because Plaid was planning on launching a rival debit payment network to undercut Visa’s debit network. The suit is likely to effectively end the planned acquisition.
Data is increasingly the front line in the payment and fin-tech wars. Plaid has a developed a powerful financial data network that asks users to share their bank account credentials and then enables the company to access consumer data for free from leading bank portals.
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