Fintech startup Plaid Inc. is planning a foray into the payments business, less than a year after an antitrust lawsuit scuttled its high-price acquisition by Visa Inc.
Plaid creates software that enables lenders and other financial institutions to plug into their users’ financial accounts, with their permission, and access their financial data to look up account balances or authenticate personal financial details.
Plaid is gearing up to unveil a new program Thursday that will leverage the software to provide a seamless and more affordable option to consumers and businesses who wish to make digital payments funded by their bank accounts.
Under this new plan, Plaid won’t be directly involved in moving money, instead, it has signed up a number of payment processors and tech companies in North America and Europe for that. Some of the said firms include Square Inc., Stripe Inc., Silicon Valley Bank, and SoFi Technologies Inc.’s Galileo unit.
Those firms would then offer their users a pay-by-bank option along with the other payment methods, such as credit or debit cards.
The payments foray is one of Plaid’s biggest moves since its US$5.3 billion sale to Visa was stopped via an intervention by the Justice Department preventing the deal from closing.
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