Visa, one of the world’s biggest payments giants, had officially retracted its decision regarding its acquisition of Plaid, a fintech startup, for the tune of $5.3 billion. This came as a result of antitrust concerns causing a backlash against the move by regulators of the US. The official announcement came from the company on Tuesday.

Plaid And Visa Acquisition Completely Halted

Plaid, as a firm, offers a number of technical infrastructure APIs. These APIs, in turn, connect traditional financial institutions, consumers, and developers with each other. According to Plaid itself, it boasts a total of 200 million consumer accounts, with 11,000 banks, as well.

A merger deal was arranged between Plaid and Visa back in January of last year. Visa’s goal in this acquisition was to increase its access to the financial technology space. However, regulators from the US were quite alarmed, citing Visa’s monopoly across the payment industry.

DoJ Getting Involved

Another key development was the US Department of Justice acting against this acquisition. The DoJ moved to court against this possible deal, going as far as to sue Visa to try and block the acquisition. As for why the DoJ got involved, the agency cites one Al Kelly, the Chief Executive of Visa. In a previous statement, Kelly declared that the acquisition deal was an insurance policy to protect its debit business within the US.

Alongside this, Al Kelly apparently stated that the deal itself had nothing to do with money. Instead, it was deemed a strategic acquisition. It seems the Department of Justice really didn’t appreciate that distinguishing fact.

The agency claimed that this multi-billion dollar acquisition would make Visa capable of maintaining its monopoly within the US payments markets. Alongside this, it will allow the company to establish incredibly competitive prices within the online debit space, as well.

The Complications

Kelly promptly confirmed the deal’s termination to the public. He cited the time since the acquisition announcement, having been over a full year, and further cited the complex, lengthy amounts of litigation that would be needed to solve the issue, which will take a considerable amount of time to be resolved.

Plaid itself isn’t in much better of a position. The firm is facing a number of class-action lawsuits leveled against it. These lawsuits claim that Plaid had been actively selling user data to various third-parties, violating their user data privacy in the process. An interesting little tidbit is that one of these lawsuits involve Visa, with Plaid allegedly throwing a sizable chunk of this data on the table as part of the acquisition deal. Of course, Plaid wholeheartedly denied any of these allegations.