The confluence of traditional players with cryptocurrency organizations has usually been considered a major metric in judging the former’s success. With the daily progress of the decentralized industry, it has become more and more common to see traditional players take the leap with fintech companies.
According to recent reports, Plaid, another major fintech organization had made the leap to mainstream applications by getting integrated with credit and debit card giant Visa.
Plaid works by allowing start-ups to connect with banks and includes a large number of high profile customers such as Coinbase, Robinhood, Gemini, and Venmo. Visa has reportedly shelled out $5.3 billion to buy the Silicon Valley-based startup. The acquisition piqued the interest of bigwigs in the cryptocurrency industry, including Ripple CEO Brad Garlinghouse. Post the news of the acquisition, Garlinghouse tweeted:
Plaid’s reach in the financial ecosystem has been so massive that the company claimed one in four Americans was connected to its application via some platform. The acquisition created a sensation in the field because it was one of the biggest buyouts in the fin-tech space.
Plaid has also made significant strides in terms of monetary benefits, raising $250 million in a 2018 Series C funding round. Visa and MasterCard had both taken part in the funding round, something that has earned them both significant dividends. This elevated the company’s valuation to a massive $2.7 billion. According to Plaid’s financial reports, the company witnessed a compound annual growth rate of roughly 100 percent since 2015.
The Al Kelly led Visa stated that the latest integration was done in a bid to expand the credit card giant’s access to fin-tech firms. At the same time, Visa also wants to accelerate its movement to areas other than just debit or credit cards. With its latest endeavor, Visa plans to address the critical security issues that are generally considered the bane of the digital assets industry.
The Plaid acquisition will give Visa the overwatch over 11,000 odd banks and the 200 million customers connected to it. Visa claims that the industry is still in its nascent stages and developments from the grassroots level is of utmost importance. Zach Perret, the co-founder and Chief Executive Officer [CEO] of Plaid added:
“We feel fortunate to have been there for the early days of fintech, and to have helped develop that ecosystem. This represents an important milestone, and the ability to work with Visa to make our products much bigger and better — both domestically and internationally.”
Visa has been slowly but surely reinforcing its entry into the fintech industry for quite some time now especially with the acquisition of Earthport in 2019. Visa had to tussle with rival MasterCard for the buyout but had its path cleared when the latter dropped out on its own.