Visa has called off its deal to buy fintech start-up Plaid for $5.3bn after the US Department of Justice sought to block the transaction on antitrust grounds.
“We are confident we would have prevailed in court as Plaid’s capabilities are complementary to Visa’s, not competitive,” Al Kelly, chief executive of Visa, said in a statement on Tuesday.
However, the company had decided to abandon the deal to avoid “protracted and complex litigation”, he said.
The DoJ moved to block the acquisition in early November, saying Plaid was planning to build a “bank-linked payments network that would compete with Visa” and describing the fintech as “uniquely positioned” to use its established connections to “enter the payments market and disrupt Visa’s monopoly”.
The decision is a blow to Visa’s effort to add fast-growing fintech services to its payments business. Plaid provides so-called “aggregator” software that allows fintechs and other financial services companies to access clients’ bank account information.