Visa has received approval from the UK Competition and Markets Authority (CMA) to acquire US-based fintech startup Plaid.

The approval follows a Phase I review by the CMA that looked into possible ways the deal could weaken the competition in the UK consumer-to-business electronic payments sector.

Visa is a major player in the sector through its card-based payments while Plaid offers payment initiation services (PIS)-enabled payment.

Plaid provides connectivity infrastructure that allows digital apps to connect with a user’s bank accounts. PIS enables consumers to make account-to-account payments in real-time, directly from a merchant’s app or website.

The CMA noted that Plaid would have been a potential rival to Visa in future. However, there are other active PIS providers in the UK who own similar or more competitive capabilities than Plaid.

Hence, the regulator concluded that the merger wouldn’t affect competition.

The deal, which is worth $5.3bn, was announced by Visa in January. It is expected to enable Visa to cooperate more closely with fintechs and grow its core business.

Meanwhile, in a separate development, Visa invested in software trusted execution environment platform provider MagicCube.

Visa, which previously invested in the MagicCube, intends to support the development of company’s contactless SoftPOS and PIN platform and its differentiating Software Defined Trust (SDT).

Visa and MagicCube plan to expand their partnership by exploring new ways to utilise the platform in the payments industry.