Moreover, he stated that the deal was strategic and not a financial one.
There are no two ways about it, the deal falling through is a blow for Visa. The allegations were primarily based on the Visa Chief, Al Kelly's previous statements, who saw the deal as an "insurance policy to protect their important usa debit business".
Visa Inc. agreed to walk away from its proposed US$5.3 billion acquisition of Plaid Inc. following a U.S. Justice Department lawsuit to stop the deal on antitrust grounds. But he added that he believes Visa and Plaid would have won the legal challenge as "Plaid's capabilities are complementary to Visa's, not competitive". San Francisco-based Plaid touts itself as "the easiest way for users to connect financial institutions to an app", offering a suite of APIs that smooth the flow of financial information between banks, payment apps and other financial services. "However, it has been a full year since we first announced our intent to acquire Plaid and protracted and complex litigation will likely take substantial time to fully resolve", he said.
Beyond Visa, Plaid also counts marquee names in finance - including Goldman Sachs Group Inc. and Citigroup Inc. - as investors.
Antitrust regulators argued Visa's acquisition of Plaid would eliminate a nascent competitor offering a "lower-cost option for online debit payments" and "deprive American merchants and consumers of this innovative alternative to Visa and increase entry barriers for future innovators". Hundreds of banks have joined the platform since Visa announced its takeover, Zach Perret, CEO and co-founder of Plaid, said in a separate blog post. Hundreds of new banks joined our platform, and over 4,000 companies turned to Plaid as the infrastructure to support their businesses, including numerous largest Fortune 500 companies who are focused on bringing digital financial products to their customers.
Visa denied the assessment, arguing that it "reflects a lack of understanding of Plaid's business" on the part of the DOJ. Mastercard received Department of Justice approval for the deal in the same month that the department filed suit against Visa and Plaid.