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Photo Illustration: Igor Golovniov/SOPA Images/LightRocket via Getty Images

The U.S. Justice Department on Thursday sued to block Visa's proposed $5.3 billion purchase of Plaid, a San Francisco-based provider of analytics software for accessing transaction data.

The bottom line: Plaid lets fintech startups connect to users' bank accounts, but the DOJ argues that the merger would eliminate Plaid's potential ability to compete in the online debit market, thus giving Visa a monopoly. Visa told WSJ it plans to "defend the transaction vigorously.”

Background: Plaid was founded in 2013, and is sometimes referred to as the fintech market's "plumbing" — kind of like Stripe, but a bit further down the payments infrastructure stack.

  • The company raised more than $300 million in VC funding, most recently at a $2.3 billion post-money valuation in late 2018.
  • Investors include Spark Capital, NEA, Kleiner Perkins Growth, NEA, Citigroup, Goldman Sachs, Index Ventures, and Andreessen Horowitz, Visa and MasterCard.
  • The $5.3 billion sale price is said to include around $400 million tied to retention bonuses and other Plaid employee compensation.
  • There were other bidders for Plaid, in addition to Visa, in part because there aren't really any other companies of the necessary scale that could serve as a viable Plan B.

A Plaid spokesperson declined comment.

Go deeper

Visa and Plaid terminate merger agreement

A Visa card. Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Visa has terminated its proposed $5.3 billion purchase of Plaid, a San Francisco-based provider of analytics software that connects fintech startups to users' bank accounts, the Justice Department said in a statement.

Why it matters: The DOJ alleged in its civil antitrust lawsuit filed in November to block the merger that Visa is a "monopolist in online debit" and would eliminate Plaid's potential ability to compete in the online debit market.

Scammers seize on COVID confusion

Data: FTC; Chart: Sara Wise/Axios

Scamming has skyrocketed in the past year, and much of the increase is attributed to COVID-related scams, more recently around vaccines.

Why it matters: The pandemic has created a prime opportunity for scammers to target people who are already confused about the chaotic rollouts of things like stimulus payments, loans, contact tracing and vaccines. Data shows that older people who aren't digitally literate are the most vulnerable.

12 hours ago - Politics & Policy

Biden explains justification for Syria strike in letter to Congress

Photo: Chris Kleponis/CNP/Bloomberg via Getty Images

President Biden told congressional leadership in a letter Saturday that this week's airstrike against facilities in Syria linked to Iranian-backed militia groups was consistent with the U.S. right to self-defense.

Why it matters: Some Democrats, including Sens. Tim Kaine (D-Va.) and Chris Murphy (D-Conn.) and Rep. Ro Khanna (D-Calif.), have criticized the Biden administration for the strike and demanded a briefing.