Plaid, the financial bouncer of fintech apps, gets acquired by Visa for $5.3B

Whip out the corporate card... Visa is swiping $5.3B to treat itself to Plaid. You've used Plaid and didn't even know it — the FinTech unicorn connects your old school Citi, Bank of America, or Wells Fargo bank account to financial apps like Venmo, Robinhood, or Coinbase. Here's how Plaid's more like a financial bouncer (call it "the club analogy"):

• ID Scan: After downloading Venmo, you enter your bank account login info on Venmo to pay Ashley back for the $15 cocktail — Plaid grabs that username/password.
• Bouncer: Once Plaid verifies the ID with your bank, your checking account gets in to party in Venmo.
• Security: Plaid securely holds your bank info so that it can safely travel across the web (like a Chanel purse left at coat-check).
• Stamp: You're in — Your account is linked to Venmo. That bank account doesn't need to show ID again.

Plaid is a bouncer with connections... It's a low-profile service, but it dominates the fast-growing financial app space:

• Plaid connects 200M accounts at 11K banks to 2,600 FinTech apps.
• A whopping 25% of Americans have connected their accounts to a fintech app through Plaid (anyone still use Mint?).

THE TAKEAWAY

Keep your friends close... and your enemies acquired. Think of the financial info Plaid has access to — LendingClub can use your debit card data to learn your spending habits, then decide on a loan for you. With the same info, Plaid could someday offer its own credit card — aka a Visa competitor. So Visa snagged Plaid instead, before its other investors (Citi, Mastercard, Goldman, AmEx) could.