Visa-Plaid merger is called off after U.S. files antitrust lawsuit

Visa Inc. on Tuesday called off its planned $5.3-billion purchase of payment-processing technology company Plaid, citing the Justice Department’s antitrust lawsuit filed last year to block the deal.

Plaid provides the infrastructure that allows consumers and businesses to make payments directly from their bank accounts. Services such as Venmo, SoFi, Stripe and TransferWise use Plaid as a way for consumers to send money from their bank accounts to another party without having to use the debit-card infrastructure that’s largely controlled by Visa and its competitor Mastercard.

After Visa bid to buy Plaid, politicians and antitrust experts argued that the deal would give Visa — which is already the largest payment-processing company in the world — even more power over how individuals and businesses pay for goods and services.

The Justice Department’s lawsuit argued, among other things, that the deal would enable Visa to “maintain its monopoly position and supracompetitive prices in online debit.”

Visa said that it still believes the deal between the two San Francisco companies would have benefited consumers, financial institutions and developers but that it decided to scrap it to avoid an extended court battle.

“It has been a full year since we first announced our intent to acquire Plaid, and protracted and complex litigation will likely take substantial time to fully resolve,” Visa Chief Executive Al Kelly said in a statement.