- Mastercard and Visa invested in fintech company Plaid during a Series C round last year, Plaid CEO Zach Perret revealed in a blog post Monday.
Eighty percent of major fintech firms, including Venmo, Chime and Betterment, rely on Plaid's application programming interfaces to connect with customers' bank accounts, the company claims, and one in four Americans with bank accounts are served by its platform, according to Fortune.
- The move shows the willingness of traditional payment leaders to embrace disruption in the market. It follows Mastercard's announcement last week of its partnership with software provider R3 to develop a blockchain-powered platform focused on business-to-business cross-border payments.
Plaid left vague the ways its business would be affected by the payment card giants, saying it would "work with Mastercard and Visa at the intersection of payments and data access," according to Reuters.
"As an industry, when we come together with a shared vision for an ecosystem that is open, secure and encouraging of innovation, the possibilities are limitless," he said, according to TechCrunch.
Visa may see the investment as a way to not only enhance the payments process on a global scale. It also may look at Plaid's capabilities through a lens of how to better serve its own customers, said Bill Sheedy, executive vice president of Visa's strategy group.
"We look at the broader consumer experience that has the potential to be enhanced through [Plaid's] APIs — things like verifying user identification to reduce fraud, and verifying account balances in real time," he told Fortune. "The alignment with Plaid's target customers, and what they're doing in terms of building value-added services on top of financial data, seems like a strong strategic move [for Visa]."
Plaid is valued at $2.65 billion.
"Fintech is growing, and we're the infrastructural layer that's powering that growth," Sima Gandhi, Plaid's head of business development and strategy, told Fortune. "We're really excited to partner with Visa and Mastercard to drive the next era of transformation."