Visa Inc grew into one of the world’s most valuable financial companies by serving as the pipes that help connect banks and merchants.
Now, it is making a major bet on doing the same for data between banks and financial start-ups.
Visa agreed to pay US$5.3 billion for Plaid, a financial technology (fintech) firm that connects popular apps such as Venmo to customers’ data in the established banking system.
The deal caps a meteoric rise for Plaid and aims to keep fueling Visa’s own ascent, which has seen its stock triple in the past five years.
The sale price is double Plaid’s US$2.65 billion valuation in a 2018 funding round.
Plaid’s developer tools help power a range of popular financial apps — such as Venmo, Coinbase Inc and Acorns Grow Inc — by channeling the banking data that they need for their apps and Web sites.
Founded in 2012, the firm has more than 200 million accounts linked on its platform, an investor presentation said.
That access underscores the demand from consumers to send their data to services that can move funds between accounts or into cryptocurrencies, give advice on personal finances, or reimburse a friend after brunch.
“We don’t see changing Plaid’s model. We see helping them accelerate their growth,” Visa chief executive officer Al Kelly said on a conference call about the way that Plaid earns its fees.
However, the way that data is shared would probably change, Visa president Ryan McInerney said in an interview.
Visa would work with banking partners, including JPMorgan Chase & Co, to ensure that fintechs are collecting consumers’ data “appropriately,” McInerney said.
“We have deep relationships with most financial institutions and we intend to evolve” Plaid’s data practices, he said.
As a benefit, fintechs might get more reliable connectivity.
Visa and Mastercard Inc are also investors in the company, Plaid said in a blog post last year.
Visa said that it expects the takeover to close in the next three to six months, with the acquisition adding 80 to 100 basis points to revenue growth in fiscal year 2021.
Longer-term, the deal would let Visa play a greater role in the financial industry’s tech-driven evolution, Kelly told analysts on a call.
“We see this giving us options and growth potentials at least for the next decade,” he said.
With the speed cryptocurrency is emerging as the millennial generation’s alternative asset of choice in India, it is hard to imagine that just two years ago a couple of blockchain pioneers were briefly in police custody. Sathvik Vishwanath and Harish BV, cofounders of a then five-year-old start-up, were arrested in late 2018. No, they had not pulled off a shady initial coin offering. Their “crime” was that they put up a kiosk in a mall in Bangalore where customers could swap bitcoin, ether or ripple for cash or vice versa. That was the whole point of unocoin, their crypto token exchange.
FIVE NEW FABS: An acquisition of Siltronic would boost GlobalWafers’ market share from 17 to 30 percent, easily surpassing Japanese rival Sumco’s 25 percent GlobalWafers Inc (環球晶圓) yesterday said it is in final talks to acquire Germany-based Siltronic AG in a 3.75 billion euro (US$4.5 billion) deal, which might help it compete with its closest rival Sumco Corp of Japan. The acquisition would be the fifth for GlobalWafers since 2008, as it has grown to become the world’s No. 3 supplier of silicon wafers through such deals. GlobalWafers, which has a 17 percent market share, would see its market position greatly elevated to 30 percent when combined with Siltronic’s 13 percent, according to a presentation Siltronic gave to its investors at a quarterly conference in August. Sumco
A Chinese factory owned by South Korean semiconductor giant SK Hynix Inc yesterday halted operations after a plant worker was found to have an asymptomatic infection of COVID-19, Xinhua news agency reported. The South Korean worker based at the plant in Chongqing since February had departed on Thursday for South Korea, Xinhua reported. He was tested at Incheon Airport in Seoul and confirmed positive for COVID-19 on Saturday, it reported. All factory staff as well as staff and recent guests at the hotel where the worker lived have been isolated and given nucleic acid tests, the agency said. “We’re cooperating with the local government
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