Fintech’s extraordinary goldrush continues

Visa’s acquisition of San Francisco based Plaid for in excess of $5,300,000,000 reflects how Fintech is changing way we all use financial services and the enormous potential this exploding market has for entrepreneurs and investors alike.

Visa’s acquisition of Plaid represents both an entry into new businesses and complementary enhancements to Visa’s existing business. Firstly, Plaid’s fintech-centric business opens new market opportunities for Visa both in the U.S. and internationally. Secondly, the combination of Visa and Plaid provides the opportunity to deliver enhanced payment capabilities and related value-added services to fintech developers. Finally, the acquisition will enable Visa to work more closely with fintechs through all stages of their development and drive growth in Visa’s core business.

“This acquisition is the natural evolution of Visa’s 60-year journey from safely and securely connecting buyers and sellers to connecting consumers with digital financial services,” said Kelly. “The combination of Visa and Plaid will put us at the epicenter of the fintech world, expanding our total addressable market and accelerating our long-term revenue growth trajectory.”

What is Plaid? Founded in 2013, it is a financial data network that makes it easy for people to securely connect their financial accounts to the apps they use to manage their financial lives. 

It says that it provides safe, secure connections for 80% of the largest U.S. fintech apps:

  • 11,000+ bank and financial services companies 
  • 2,600+ fintech developers 
  • 200+ million consumer accounts, including one in four people with a U.S. bank account. 

Visa has given it rationale – have a read of the attached pdf – but however you look at it, $12,000,000 per employee is a serious investment.  It is a great document that summarises the market beautifully.  It takes three minutes to read it.

Polestar is working with a number of fintech companies at the moment who certainly have their eyes on the potential prize.  This deal shows why 60% of the world’s population have internet access.  Who wants to visit a bank or carry cash?

Connectivity between financial institutions and developers has become increasingly important to facilitate consumers’ ability to use fintech applications. 75 percent of the world’s internet-enabled consumers used a fintech application to initiate money movement in 2019 versus 18 percent in 2015

By Richard Hall on 28/01/2020