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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

#31

Post by brendoelfrendo »

capableweb wrote: post #13
haltingproblem wrote: post #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 positio…

> The complaint alleges that Visa’s CEO viewed the acquisition as an “insurance policy” to protect against a “threat to our important US debit business.” This quote makes it sound like Visa is acting monopolistic, which is the behavior they don't want to see. Rest of the paragraph > This acquisition is the second-largest in Visa’s history, with an extraordinary price tag of $5.3 billion. Visa’s CEO justified the deal…

Yeah, the Justice Department may not have scrutinized this acquisition all that much, but this guy said the quiet part out loud.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#33

Post by semerda »

ceejayoz wrote: post #24
JadoJodo wrote: post #17

Earlier quoted context omitted.

I was under the impression that they didn’t have access to any APIs but that they simply took your credentials and scraped the bank webpage.

They do some of both. When I link a Capital One account, I get an OAuth-style flow and the ability to select which accounts I share directly on the C1 website. The sites I use this on show up as "Linked Apps" in my security settings in C1. Others use the credentials-based flow.

Where they aren’t using APIs and instead the scrapers, does that mean they have your banking login credentials? Be curious to hear how they get around MFA.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#34

Post by travisoneill1 »

nobody9999 wrote: post #20

I was struck by this bit: 'If Plaid remained free to develop its competing payment platform, then “Visa may be forced to accept lower margins or not have a competitive offering."' My understanding is that Plaid would/could charge significantly less (up to 50% less) than Visa currently does. And that's the value of competition . Not necessarily as a race to the bottom (as we've seen in the airline industry, but that's…

Isn't a race to the bottom the best possible thing that could happen to transaction fees?

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#35

Post by [deleted] »

haltingproblem wrote: post #23
cactus2093 wrote: post #10

Earlier quoted context omitted.

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 tra…

Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute.

[deleted]

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#36

Post by sadfev »

travisoneill1 wrote: post #34
nobody9999 wrote: post #20

I was struck by this bit: 'If Plaid remained free to develop its competing payment platform, then “Visa may be forced to accept lower margins or not have a competitive offering."' My understanding is that Plaid would/could charge significantly less (up to 50% less) than Visa currently does. And that's the value of competition . Not necessarily as a race to the bottom (as we've seen in the airline industry, but that's…

Isn't a race to the bottom the best possible thing that could happen to transaction fees?

To a certain extent, it is detrimental if the prices are lower than the transaction expenses. Because you have to pay indirectly which is even worse

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#37

Post by propogandist »

semerda wrote: post #33
ceejayoz wrote: post #24

Earlier quoted context omitted.

They do some of both. When I link a Capital One account, I get an OAuth-style flow and the ability to select which accounts I share directly on the C1 website. The sites I use this on show up as "Linked Apps" in my security settings in C1. Others use the credentials-based flow.

Where they aren’t using APIs and instead the scrapers, does that mean they have your banking login credentials? Be curious to hear how they get around MFA.

Yes, they also can monitor and scan your financial transactions. Accepting their T&C and Privacy Policy gives them too much power, consumers are freely giving away access to their financial information for convenience.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#38

Post by throwawaysea »

nobody9999 wrote: post #22
throwawaysea wrote: post #15

Consolidation is bad, and big megacorps effectively break the market dynamic that fosters healthy competition, innovation, and reduces the cost of goods/services. I am happy to see acquisitions by megacorps blocked in general. But really we need a revision of antitrust law for the modern era, and we need it to be enforced.

>But really we need a revision of antitrust law for the modern era, and we need it to be enforced. What revisions would you like to see? The underlying activities that make up the behavior we call "antitrust" haven't really changed. I'd say the solution is much more about muscular enforcement than revising the law. That said, there may be something I'm missing here.

I'm being vague, but I think my concern is that the focus on "monopolistic behavior" is archaic. Harm to a healthily competitive environment can result from a few big players existing rather than a single dominant one. It may not even require certain "behavior" as much as a large entity with lots of capital simply existing. There are also big barriers to entry in any business that is built on network effects - even there, we need a mechanism to enable competition.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#39

Post by Ericson2314 »

nobody9999 wrote: post #22
throwawaysea wrote: post #15

Consolidation is bad, and big megacorps effectively break the market dynamic that fosters healthy competition, innovation, and reduces the cost of goods/services. I am happy to see acquisitions by megacorps blocked in general. But really we need a revision of antitrust law for the modern era, and we need it to be enforced.

>But really we need a revision of antitrust law for the modern era, and we need it to be enforced. What revisions would you like to see? The underlying activities that make up the behavior we call "antitrust" haven't really changed. I'd say the solution is much more about muscular enforcement than revising the law. That said, there may be something I'm missing here.

Override the caselaw to take "consumer welfare" off its special pedestal. The higher order effects are much more important,

I would also allow sufficiently-employee-owned companies to be exempt in certain respects, to keep the co-op path to socialism open :).

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#40

Post by lambda_obrien »

semerda wrote: post #33
ceejayoz wrote: post #24

Earlier quoted context omitted.

They do some of both. When I link a Capital One account, I get an OAuth-style flow and the ability to select which accounts I share directly on the C1 website. The sites I use this on show up as "Linked Apps" in my security settings in C1. Others use the credentials-based flow.

Where they aren’t using APIs and instead the scrapers, does that mean they have your banking login credentials? Be curious to hear how they get around MFA.

When i used Mint at first, they'd just ask you to go to the page with the caphcha or whatever and go through it when you'd update your accounts with the auth scraper method. This was like maybe a decade ago? You could do a similar thing with mfa in realtime.
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