The US Department of Justice (DOJ) has filed a civil antitrust lawsuit against payment behemoth Visa’s $5.3bn acquisition of fintech Plaid.

The complaint, filed with the US District Court for the Northern District of California, alleged that the deal flouted Section 2 of the Sherman Act and Section 7 of the Clayton Act.

The Plaid deal was announced by Visa in January 2020 and was cleared by the UK Competition and Markets Authority (CMA) this August.

Reports of DOJ scrutinising the Plaid deal over antitrust concerns were flagged last month.

The Department believes that the deal could negatively impact competition in the payments sector.

It said that the deal would do away with the significant competition from Plaid, which is building a payments platform that would challenge Visa’s monopoly in the online debit market.


The lawsuit accused Visa CEO Alfred Kelly of seeing the deal as an “insurance policy” to protect against a threat to its US debit business.

He justified the deal to its board as a “strategic, not financial” move, saying that “our US debit business is critical, and we must always do what it takes to protect this business.”

In the complaint, he was quoted as saying that Plaid “on their own or owned by a competitor was going to create some threat” with a “potential downside risk of $300-500m in our US debit business” by 2024 unless acquired.

“Visa may be forced to accept lower margins or not have a competitive offering” if Plaid develops its payment platform, the CEO said.

Additionally, the complaint also alleges that Visa has prevented rivals, including Mastercard, from expanding or entering the online debit space.

About Plaid

Plaid allows developers to connect consumers’ financial accounts, with their consent, to some fintech apps.

This allows them to aggregate spending data, check balances, and verify other personal financial data.

According to the DOJ, Plaid connects to 11,000 banks and 200 million bank accounts.

As a result, Plaid has become a financial data aggregation giant in the US, according to the complaint filed.

The company is now planning to create a bank-linked payments network on its money movement platform.

This will allow consumers to pay merchants from their bank accounts directly, disrupting Visa’s monopoly in the online debit industry.

According to the complaint, Visa controls nearly 70% of the online debit transactions market.


DOJ antitrust division assistant attorney general Makan Delrahim said: “American consumers and business owners increasingly buy and sell goods and services online, and Visa – a monopolist in online debit services – has extracted billions of dollars from those transactions.

“Now, Visa is attempting to acquire Plaid, a nascent competitor developing a disruptive, lower-cost option for online debit payments.

“If allowed to proceed, the acquisition would deprive American merchants and consumers of this innovative alternative to Visa and increase entry barriers for future innovators.”

A spokesman for Visa said that the lawsuit is “legally flawed and contradicted by the facts. The combination of Visa and Plaid will deliver substantial benefits for consumers seeking access to a broader range of financial-related services, and Visa intends to defend the transaction vigorously.”

“Visa’s business faces intense competition from a variety of players—but Plaid is not one of them.”