UK competition authority CMA, has cleared the Visa’s acquisition of Plaid, a start-up in fintech industry, after a Phase 1 review.
Visa is a global leader in electronic payments and Plaid is a technology platform provider that builds connectivity infrastructure, which enables digital apps to connect with a user’s bank account. Plaid also offers payment initiation services (PIS) in UK. These services can be used as an alternative to paying online using a credit card or debit card because they allow to make real-time account-to-account payments directly from a merchant’s app or website.
Visa announced to buy Plaid in a deal worth $5.3 billion. Plaid is a small player in the UK’s payment services sector but CMA examined its prospects for future growth. CMA focused on the effects of the deal in the UK consumer-to-business electronic payments sector which is Visa and Plaid are both active. The CMA found that Plaid is only one of PIS providers and most of them already similar or stronger than Plaid. After the acquisition, Visa would continue to face sufficient competition from PIS-enabled payments. On the other hand CMA also considered if Visa can use as a leverage its strong position in card-based payments to push the rivals of Plaid from the market and concluded that the combined undertaking would not have the ability for doing that.
In conclusion the CMA cleared the acquisition after examination of wide range of evidence. (CMA – 24.08.2020)
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