NEW YORK — Visa is purchasing the financial technology company Plaid for $5.3 billion, a major push by the payment processor into other types of money transfer systems outside of credit and debit cards.
Plaid allows consumers to link their bank accounts to financial services apps like Venmo, PayPal, Betterment and Transferwise. The company is an important but relatively unknown middle man between the banks, who hold consumers’s cash, and the dozens of platforms who vie to be the platform of choice to that cash.
In a statement, Visa estimates that one in every four Americans who have a bank account have used the underlying technologies of Plaid to link their bank accounts with other money transfer apps.
The Monday announcement is Visa’s first big push into a product that isn’t just credit and debits cards. Visa is the world’s largest payment processing company, but it makes almost entirely all of its money from swipe fees it earns from merchants whenever its cards are accepted.
Visa was already an investor in Plaid, and so is Visa’s biggest competitor, Mastercard. Both companies invested in Plaid in 2019.