Visa Moves Further into FinTech with Two New Deals

Visa made two big deals in one week, with CEO and Chairman Alfred Kelly leading both an acquisition and key investment in the FinTech market.

On January 23rd the company announced that it had signed a definitive agreement to acquire Plaid, which helps consumers securely connect their financial accounts to apps, for $5.3 billion.

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“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business,” said Kelly in a press release. “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.”

Visa pointed out that 75 percent of the world's consumers with access to the Internet used a FinTech app to move money last year, compared to 18 percent in 2015. And one in four people with a U.S. bank account have used Plaid to connect to more than 2,600 FinTech developers across more than 11,000 financial institutions.

This isn’t the first time Visa and Plaid have done business. Visa participated in a funding round at the end of 2018 for $250 million, with Plaid valued at $2.6 billion at the time. This acquisition will allow Visa to enter new businesses in the U.S. and abroad, as well as boost its existing business via enhanced payment capabilities and related services so that the payments giant can work closely with FinTech developers through all stages.

Just a few days after the Plaid announcement, Visa said that it had made an undisclosed investment in Very Good Security (VGS), which helps FinTech companies protect their data. VGS, which works with startups like Brex and Petal, was chosen by Visa as a partner for its Fintech Fast Track program earlier this year. The company joined other investors in VGS, including Goldman Sachs, Andreessen Horowitz, Vertex Ventures US, and Max Levchin (co-founder of PayPal).

VGS will use this new infusion to expand access to its infrastructure-as-a-service for FinTechs and large enterprises.

Kelly has been Visa’s CEO since December 2016, chairman of the board since April 2019, and a member of the board of directors since 2014. Under his leadership, Visa has invested in a variety of startups, including payment processing firms Square and Finix, and Gojek, an Indonesian ride-hailing company.