Credit and payments giant Visa Inc. has reportedly paid over $5 billion for a fintech firm that provides services to connect payments apps to bank accounts. It could be good news for the fintech and crypto industry for the coming years.
Visa Pays $5.3 Billion For Plaid
The credit card giant aims to tap into consumers’ growing use of fintech apps and internet payments with its latest acquisition. Visa has reportedly paid $5.3 billion for the startup as the industry has evolved into a more app-based ecosystem.
Plaid provides software that gives apps like Venmo and Square Cash access to financial accounts. The San Francisco based fintech firm raised funding a year ago at a $2.65 billion valuation, which has now just doubled.
Visa meanwhile has a market value of $420 billion, roughly double that of the entire crypto asset market capitalization. The company made a staggering $23 billion in revenue last year so it clearly doesn’t want Plaid for its earning potential.
The company is looking to expand its client base, which is largely based on banks providing debit and credit cards, into the burgeoning internet payments arena.
Plaid also works with crypto-based companies such as Robinhood and Coinbase and Visa is eyeing a slice of that comparatively small but highly lucrative digital pie.
Visa, which pulled out of Facebook’s Libra project last year, has ambitions to roll out additional online services and has the capability to take Plaid worldwide with millions of customers across 200 countries.
Good News for Crypto and Fintech
The move does not directly affect decentralized digital asset markets but it could be good for wider adoption in the long run.
Co-founder and partner at Morgan Creek Digital, Anthony Pompliano, commented on how the industry is shifting.
“Incumbent financial services companies are going to spend the next 3-5 years buying up various fintech startups. If they don’t, the startups will put them out of business.”
While Ripple’s chief executive, Brad Garlinghouse, echoed the sentiment adding;
Not surprising to see this kind of consolidation, and expect this will set the stage for more to come in 2020 – in fintech, crypto and beyond. https://t.co/SMVNxZd1br
— Brad Garlinghouse (@bgarlinghouse) January 14, 2020
Naturally, a lot of the responses were asking the fintech firm boss if Ripple would be making any exciting acquisitions over the coming year as the ‘XRP Army’ clings to any hope of their token rising from the digital ashes.
There will be a large slice of decentralization in the future of finance and although this move is far from it, the industry is changing.
Defi markets will continue to grow at a staggering pace as younger generations come to realize that they don’t need to rely on profiteering monopolies such as Visa to become their own banks.
Is the Visa acquisition a good thing for crypto? Add your thoughts below.
Images via Shutterstock, Twitter: @bgarlinghouse