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CMA Clears Visa's Anticipated Acquisition Of U.S. Fintech Start-up Plaid

The UK Competition and Markets Authority or CMA announced Monday that it has cleared Visa Inc.'s (V) anticipated purchase of US-based fintech start-up Plaid Inc.

The decision follows a Phase 1 review in which the agency investigated several possible ways the deal could harm competition.

In was in January this year that Visa announced its agreement to acquire Plaid in a deal worth $5.3 billion.

Visa is an electronic payments provider, while Plaid is a technology platform provider that builds connectivity infrastructure, which enables digital apps to connect with a user's bank accounts. In the UK, Plaid offers payment initiation services.

CMA said it considered the prospects for future growth of Plaid, which is at present a small player in the UK, within the payment services sector.

The CMA said it found that "Plaid would have been an increasing competitive threat to Visa in future, but that it is only one of a number of PIS providers already active in the UK, with several of these, such as TrueLayer, Tink, Token.io and Yapily, already possessing similar, or stronger, competitive capabilities than Plaid."

On this basis, the CMA concluded that in the UK, Visa would continue to face sufficient competition from PIS-enabled payments, and other types of services enabling consumer-to-business payments, after the merger.

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