The two largest credit card payment processing services in the world announced that they had invested in crypto serving fintech unicorn Plaid. MasterCard and Visa have given an undisclosed amount of money to the company, which was recently valued at $2.5 billion.
The investment was announced on the Plaid website, where CEO and co-founder Zech Perret explained the excitement of helping to advance the financial industry into the 21st century. According to Perret, the partnership has been inspired “by the work these networks did to digitize commerce and hold this as an example for what we hope to accomplish in financial services. We look forward to collaborating on products that lie at the intersection of commerce and financial services.”
Plaid had offered a $250 million Series C funding round in December 2018, but two of the primary investors were left out of that funding. These wound up being MasterCard and Visa.
While the amount of money invested was not announced, it is likely that the new funding was used in the acquisition of a similar startup, Quovo. This occurred in January.
Plaid is a company that builds APIs which enable customers to be able to access their bank accounts inside applications. This is done in a way that is seamless, while still providing optimal security. In a world where MasterCard and Visa are the two primary payment processing companies, they are always looking for new and innovative ways to protect transactions.
Plaid has been working with several financial institutions to help connect bank accounts and has been servicing several cryptocurrency clients, including Coinbase and Abra. They have also been working with American Express and Venmo, the mobile payment service used by PayPal.
This is just the tip of the iceberg in terms of the financial circles Plaid is involved in. This includes working with Capital One and JPMorgan Chase. There are others that are expected to be signing on soon, and this looks to be part of the reason why Mastercard and Visa got involved.
In the statement, Perret added that “We’re particularly excited about what this means for our customers and consumers. 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.”
This also looks to be another move by Mastercard to improve their own technology. They have already become a real player in the use of blockchain technology, and have recently hired a new series of professionals to work on e-wallet and crypto projects.
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