Visa Inc. has signed a definitive agreement to acquire the fintech startup Plaid Inc. for $5.3 billion.
Plaid's network links consumers' bank accounts to their third-party finance apps and services such as PayPal Holdings Inc.'s Venmo LLC payments app. According to the company's press release, 75% of consumers who use the internet used a fintech app to move money in 2019, compared with only 18% in 2015.
Plaid's network connects 2,600 fintech developers to about 11,000 financial institutions, according to the company. The deal will help Visa work closely with fintech startups earlier in their development, Visa said.
Visa will fund the transaction from cash on hand and debt issuance. The transaction is expected to close in the next three to six months.
The deal comes roughly a month after tensions arose between PNC Financial Services Group Inc. and Venmo over the sharing of customers' bank account information through Plaid.