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Visa to face antitrust suit over Plaid acquisition

November 5, 2020, 4:50 PM UTC

The U.S. Justice Department sued to block Visa’s $5.3 billion acquisition of Plaid over concerns that the deal would harm competition in the global payments market.

The Justice Department filed an antitrust complaint in federal court in San Francisco Thursday.

The deal would give Visa control over an important data provider to apps like PayPal’s Venmo, which allows consumers to send money to friends and merchants without using Visa’s network.

Visa didn’t immediately respond to requests for comment. Plaid declined to comment.

Visa shares rose 3% to $199.81 at 10:38 a.m. after earlier rising as much as 3.6%. The stock has advanced 6.4% this year, compared with the 32% gain of the S&P 500 Information Technology Index.

Regulators have long had antitrust concerns about the market power Visa and its rival Mastercard wield over global payments systems. The two have faced pressure to lower the fees they set on card payments from governments around the world, including in the U.S.

With Plaid, Visa would gain access to 200 million consumer bank accounts and 2,600 financial technology apps. Those connections would help the company further its push into new areas like real-time payments and digital wallets.