News and resources on payments systems, innovations and initiatives worldwide.
Plaid launches A2A payments programme

Plaid launches A2A payments programme

In the wake of a failed takeover by Visa, open banking platform Plaid is making a move into account-to-account payments.

The firm has put together an ecosystem of payment partners in North America and Europe - including Square, Dwolla and Currencycloud - that will integrate Plaid's connectivity technology into their processing systems for bank payments.

This means that companies can add a pay-by-bank option at checkout, with the funds transfered by the ecosystem partners.

Plaid says that account-based payments are set to be at the centre of the shift to digital wallets, helping to save businesses a fortune in credit card fees.

In January, Visa abandoned its planned $5.3 billion takeover of Plaid after the US Justice Department filed suit to block the combination over competition concerns.

The DoJ determined that the acquisition of Plaid by Visa would eliminate a nascent competitive threat to the card scheme's own business because Plaid was planning its own payment service.

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 22 October, 2021, 10:07Be the first to give this comment the thumbs up 0 likes

More competition is supposed to lower lower prices. The credit card industry has resolutely defied that common wisdom. There are literally tons of credit card issuers and credit card acquirers but APR has remained steady in the 24-36% range and MDR, in the 2-3% range, all thru' the industry's existence for 50+ years. 

Now that Plaid has launched A2A payments, as foreseen by the regulator when it blocked the acquisition of Plaid by Visa, we will see how much pressure its competing payment service puts on credit card APR and MDR.