Credit: SOPA Images / Contributor
Feel like you’ve been stuck in purgatory the past few days? Zach Perret knows a thing or two about that.
The CEO and co-founder of Plaid — one of the world’s hottest fintech firms — has been waiting anxiously since January to close the $5.3B sale of his startup to Visa.
And yesterday, the DOJ filed an antitrust suit to block the deal.
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Let’s say you visited a corporate matchmaker…
Behind curtain 1 is a ~$420B financial services beast that tussles with Mastercard for pole position in the race to dominate electronic payments.
Behind curtain 2 is a flashy newcomer that thinks “tech first, finance second.” It builds APIs that connect with client bank accounts and integrates with apps like Venmo and Robinhood.
It’s a great match but troubling from a competition standpoint
While Visa is a major player in credit cards, its real stranglehold is in debit transactions, where it controls 70% of the US market. Plaid has links to ~200m bank accounts and 11k financial institutions.
Visa’s CEO Al Kelly previously called the Plaid acquisition an “insurance policy” against a “threat to our important US debit business.”
Turns out, when you publicly acknowledge an anticompetitive motive, the DOJ will remind you of it (they literally highlight Kelly’s own words in the antitrust suit).
And, now, Perret will have to keep waiting.