The U.K. CMA [Competition and Markets Authority] has given the green light to Visa’s acquisition of fintech startup Plaid after a Phase 1 review.
In line with a recent official announcement, the CMA investigated several ways within which the deal could potentially harm competition, but ultimately found no evidence that this outcome was likely.
Plaid offers a platform permitting applications to attach to a user’s bank accounts. In the United Kingdom, it offers PIS [payment initiation services], which permit direct real-time payments to be made via merchant websites, without use of credit or debit cards.
The CMA focused on whether this deal could affect the U.K. based users-to-business electronic payments sector, within which both Visa and Plaid are active.
It found that Plaid would likely became an increasing competitive threat to Visa within the mere future. However, there are already variety of other similar or stronger PIS providers in the United Kingdom and hence Visa would still face competition during this sector after the acquisition.
The CMA also considered whether Visa would be able to drive Plaid’s rivals out of the market by leveraging its strong position to provide a combined card & PIS-based payment system.
Again it found that this wasn’t the case, as a user generally wish to use multiple suppliers for payment options, and other PIS providers would even be able to enter into similar collaborations.
As reported earlier, Plaid has been hit by variety of class-action lawsuits alleging violation of privacy laws, although the firm denies the any allegations imposed.