Kelly told analysts his company could partner with Plaid to offer Visa’s services to fintechs.
“We are confident in Zach and the team’s ability to lead Plaid as the digitization of finance continues, and we support the company’s decision to pursue an independent path,” Mary Meeker, a member of Plaid’s board and an investor, said in an emailed statement.
Debit Competition
Visa’s debit business has been facing mounting scrutiny from antitrust regulators. The Federal Trade Commission issued a civil investigative demand last year seeking additional documents after the agency’s Bureau of Competition began looking into whether Visa’s actions prohibited merchants’ ability to route certain payments over alternative debit networks.
Visa learned while conducting due diligence on Plaid that the venture planned to create a money-movement business and aimed to offer the service at a 50% discount to Visa’s fees, according to the Justice Department’s court filing in November. Visa earned $4 billion from its debit business in 2019, with roughly half of that coming from its facilitation of online debit payments, the department said.
In its response last month, Visa argued Plaid had no reasonable path to creating a compelling, two-sided payments network, given it has no consumer awareness of its products or merchant adoption.
“The reality is that the debit market is highly competitive and highly complex,” Kelly said on the call. “Our debit business faces intense competition from a variety of players, including ten different debit networks and we face vigorous competition from other forms of payments, including cash, check and credit.”
-With assistance from David McLaughlin.
This article was provided by Bloomberg News.