Christopher Haruna Hamman is a Freelance content developer, Crypto-Enthusiast and tech-savvy individual. He is also a Superstar Content Developer, Strategy Demigod, and Standup Guy.
Plaid revealed that Mastercard and Visa have strategic investments made during a series C funding last December. While this raises prospects for greater innovation in the financial ecosystem, do we want another tech giant with access to too much data?
Fintech payments company Plaid has indicated that both Mastercard and Visa are investors. Plaid Indicated this yesterday while letting the cat out of the bag about its series C funding which occurred in December 2018. The amounts invested by either payments organization has not been disclosed.
At the last round of funding the company has been valued to be at least worth $2.65 Billion. The company uses Application Programming Interfaces (APIs) to link the banking system and bank accounts within the United States to applications such as Veem and others. So far, it has claimed to have an uneven 80% share of its market.
Plaid seems to have made itself to become a cornerstone in the US financial ecosystem. It seems that the startup has quietly become the financial superpower that other fintech startups depend on to get the basic stuff done.
From the documentation assistants on taxes to remittance services and even artificial intelligence services which predict and assist in several aspects of the financial markets, Plaid’s API has been doing quite a lot lately. From Venmo which is a fee-free remittance service to cryptocurrency exchange Coinbase and Robinhood which is a no-commission stock trading platform, they seem to have a solution to everyone’s’ problems and it seems that they are doing it quite nicely too.
A Question of Too Much Power
While it may sound far-fetched, this brings to mind the anti-trust mindset that the United States government has. Faced with multiple companies which already dominate several areas of the technology space (Google with search engines, Microsoft with operating systems and so forth) this brings yet another monopoly to the table of the technology giants only this time they are conquering the only place no one else has: the banking system.
When one company handles more than 80% of the various new kinds of transactions going through the world’s most powerful economy, it presents the problems that big data companies are all facing at the same time: too much data which in itself is too much power.
How Plaid Will Work with Mastercard and Visa
As a Business-to-Business service, it makes strategic sense that the two largest competitors in the field of payment processing will produce the kind synergy that fosters innovation. While there is a standing commitment to making a profit, it places the financial system at a strategic advantage in term of the kinds of solutions that will be available to the public.
In a statement Bill Sheedy who is the Vice-President of Visa’s strategy group told Fortune Magazine:
“We’re excited about working with [Plaid] to enhance payment experiences globally,” Sheedy said. “The alignment with Plaid’s target customers, and what they’re doing in terms of building value-added services on top of financial data, seems like a strong strategic move [for Visa].”
Similarly, Sherri Hammond who is Mastercard’s Executive Vice President of partnerships also said:
“Mastercard, meanwhile, is approaching its collaboration with Plaid as an opportunity to remain in step with a financial services ecosystem increasingly driven by “new products that enhance the everyday interaction and experience [of consumers].”
Mastercard has already been known for a whole lot of movement in the fintech space. So, this move was natural and will give greater room for innovation. Visa, is catching up fast as well.
What is Next for Plaid? Well, as the organization seems to be attracting the right kind so f investors and partners, we should expect another friendly technology giant with hands in almost every pie money-wise. If this is is a bad thing it is too early to tell but it is already the new society we live in. The old society is dead. Long live the new society.