WASHINGTON—The Department of Justice (DOJ) has filed an antitrust lawsuit against Visa to block its acquisition of fintech company Plaid. Plaid helps consumers connect their financial accounts to thousands of financial apps, including the popular payment system Venmo and banking and investment services like Betterment and Chime.
Visa announced the deal – with a purchase price of $5.3 billion – in January, touting the importance of "connectivity between financial institutions and developers…to facilitate consumers' ability to use fintech applications."
But the DoJ is arguing the move would give Visa too much control over the online debit transactions market.
In a complaint filed in federal court in San Francisco, the Justice Department said the deal would “eliminate a nascent competitive threat” to Visa, which it says controls more than 70%of the online debit market.
The DoJ complaint includes details related to internal Visa discussions about the threat that Plaid posed and quotes Visa’s chief executive as describing the deal to another executive as an “insurance policy” for the company’s lucrative online debit business. A third executive, the suit said, described Plaid to colleagues as a “volcano” whose services were merely “the tip showing above the water” — a point the executive backed up with a doodle, included in the complaint.