CHARLOTTE, N.C. (AP) — Visa Inc. on Tuesday called off its planned $5.3 billion purchase of payment-processing technology company Plaid, citing the Justice Department’s antitrust lawsuit filed last year to block the deal.
Plaid provides the infrastructure that allows consumers and businesses to make payments directly from their bank accounts. Services like Venmo, SoFi, Stripe and TransferWise all use Plaid as a way for consumers to send money from their bank accounts to another party without having to use the debit-card infrastructure that’s largely controlled by Visa and its competitor Mastercard.
After Visa bid to buy Plaid, politicians and antitrust experts argued the deal would give Visa — which is already the largest payment processing company in the world — even more power over how customers and businesses pay for goods and services.
The Justice Department’s lawsuit argued, among things, that the deal would allow Visa to “maintain its monopoly position and supracompetitive prices in online debit.”
In a statement, Visa said it still believes the deal between the two San Francisco-based companies would have benefited consumers, financial institutions and developers but that it decided to scrap it to avoid an extended court battle.
“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,” Visa’s CEO Al Kelly said in a statement.