Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
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Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#2"Plaid has become the leading financial data aggregation company in the United States. Plaid is planning to leverage its connections to build a bank-linked payments network that would compete with Visa. Plaid’s money movement platform would allow consumers to pay merchants directly from their bank accounts using bank credentials rather than a debit card. Plaid’s established connections and technology uniquely positions it to enter the payments market and disrupt Visa’s monopoly"
Fascinating. I think the line that DOJ is drawing is tenuous. It is not like removing Plaid from the marketplace would remove dangers to Visa's debit card monopoly. Wouldn't a Google/Apple/FB/Amazon be more of a platform threat. Google/Paypal already do this when you can directly pay from bank account to merchant. How does this help?
Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#3When can we just use some kind of CA style PKI and let banks sign customers client side certs to sign payments?
Having banks build payment networks from scratch with all kinds of weird fee structures, security problems, and other caveats really really sucks.
Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#4When can we just use some kind of CA style PKI and let banks sign customers client side certs to sign payments? Having banks build payment networks from scratch with all kinds of weird fee structures, security problems, and other caveats really really sucks.
Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#5Government's argument rests on the fact that Visa shouldn't acquire Plaid because of the potential technology they might create. This is a really dangerous argument.
This is a direct quote from the plaintiff's argument:
"While Plaid’s existing technology does not compete directly with Visa today, Plaid is planning to leverage that technology, combined with its existing relationships with banks and consumers, to facilitate transactions between consumers and merchants in competition with Visa. Like Visa’s online debit services, Plaid’s new debit service would enable consumers to pay for goods and services online with money debited from their bank accounts."
I'm not a lawyer nor an expert in payments but this seems like a stretch to me.
Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#6Government's argument rests on the fact that Visa shouldn't acquire Plaid because of the potential technology they might create. This is a really dangerous argument. This is a direct quote from the plaintiff's argument: "While Plaid’s existing technology does not compete directly with Visa today, Plaid is planning to leverage that technology, combined with its existing relationships with banks and consumers, to facil…
Big companies preemptively block competition. The government is right.
Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#7Government's argument rests on the fact that Visa shouldn't acquire Plaid because of the potential technology they might create. This is a really dangerous argument. This is a direct quote from the plaintiff's argument: "While Plaid’s existing technology does not compete directly with Visa today, Plaid is planning to leverage that technology, combined with its existing relationships with banks and consumers, to facil…
The problem is that the Visa CEO allegedly believed the potential technology was coming soon, and allegedly told the Board of Directors to acquire Plaid so Visa wouldn't have to compete with its new technology. If the Justice Department were just randomly speculating, that'd be a different story.
Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#8When can we just use some kind of CA style PKI and let banks sign customers client side certs to sign payments? Having banks build payment networks from scratch with all kinds of weird fee structures, security problems, and other caveats really really sucks.
Doesn’t chip and pin do this already?
Also, even with signatures you still need some way to reverse errant and malicious charges. Cryptography isn’t a panacea for solving all real world problems.
Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#9"Plaid has become the leading financial data aggregation company in the United States. Plaid is planning to leverage its connections to build a bank-linked payments network that would compete with Visa. Plaid’s money movement platform would allow consumers to pay merchants directly from their bank accounts using bank credentials rather than a debit card. Plaid’s established connections and technology uniquely positio…
The underlying argument is that they would probably just do it again with another competitor down the line, I believe. At its heart is anti-competitive behavior.
Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid
#10"Plaid has become the leading financial data aggregation company in the United States. Plaid is planning to leverage its connections to build a bank-linked payments network that would compete with Visa. Plaid’s money movement platform would allow consumers to pay merchants directly from their bank accounts using bank credentials rather than a debit card. Plaid’s established connections and technology uniquely positio…
It is quite a fascinating scenario.
Apple and Google wallet are integrated into the credit card processing infrastructure. So they don't compete with Visa, their payments still go over Visa's rails.
Plaid's killer feature has always been their private access to APIs that the banks won't give to anyone else. It's essentially like they're using modern web APIs while everyone else is using snail mail (i.e. ACH, bank transfers that settle in batches once per day). I'm not exactly sure how they struck those deals and why there is no reasonable, open integration path or payments protocols between banks in the US like there is in every other developed country. Is it just that the banks like making their $15 per wire transfer? It feels like there's got to be more to it but I'm not sure.
But regardless, where we've ended up is the banks have fought so well to keep everybody out of their collective walled garden, but somehow Plaid has snuck in under the radar and has become so large and entrenched that they are themselves being called the monopolist, rather than the banks that own and control the system but of which there are multiple. I don't know enough about the details of Plaid's business though to weigh in on whether there's any truth to these claims.