A look inside Visa’s shareholder presentation for the $5.3B Plaid deal

Fresh off the news yesterday that Visa is buying fintech unicorn Plaid for $5.3 billion, the payments giant is making its case to its shareholders. Given the scale of the deal, and the implied bet that Visa is making on the future of its market, the company prepared a presentation, which means we get to peer into its thinking regarding Plaid itself and the fintech market as a whole.

In a short deck, Visa argues that buying Plaid will: 1) provide it with deep access to an exploding market (fintech), 2) help it boost growth (at a small hit to profits) and 3) provide a means to expand Visa’s total addressable market by building on Plaid’s small customer base, allowing for future growth.

Access to new markets, faster revenue expansion and larger total addressable market (TAM) are pretty good things for any business. Let’s see how Visa makes its case.


In Visa’s view, the fintech world’s growth is “very high.” The credit card and payments company reports in its presentation to shareholders that fintech adoption (the percent of “internet enabled customers using at least 1 fintech app”) is growing at a 43% compound rate. Visa also highlights the amount of capital going into the space, namely $120 billion in the last five years.

The message isn’t hard to parse: Plaid is a key service provider to fintech companies and as the venture class pours capital into the category, its market will only grow larger. Because Plaid’s revenue and usage will likely grow as the fintech market itself expands, Visa will now own a piece of that usage and revenue growth.

Underscoring both points, Visa claims that “Plaid is the best-in-class platform connecting fintech developers, financial institutions and consumers.” Indeed, the company goes on to claim that Plaid works with “80% of the largest U.S. fintech apps.” So, in one move, Visa is now inside four out of the five largest American fintech applications.

Visa notes in its deck that the number of accounts linked to Plaid is growing at a 115% compound rate over the last few years to more than 200 million accounts in 2019. (The payments giant also reports that Plaid has 450 employees, making the $5.3 billion price tag work out to a staggering $11.8 million per head.)

The Plaid purchase puts Visa in the middle of the growing fintech market. That will yield growth for the acquiring entity, it thinks. That enormous penetration will boost its fiscal 2021 revenue growth by 0.8% to 1%. But that growth will come at a cost, namely “EPS dilution” of 1% to 1.5% in its fiscal 2021.

This makes Plaid a bet on the future for Visa, and not something that it expects to change its world today. This is why the growth elements of Visa’s shareholder pitch matter; it is arguing that, sure, Plaid is a real business today, but looking at the trends it’s going to be both real, and big, down the road.

(Plaid’s revenue is said to have come in between $100 million and $200 million in 2019.)

Finally, Visa says that the Plaid deal will grow its “addressable market by providing high value services to high growth fintechs.” Visa does more than one thing and it will soon (once the deal closes) have loads of new partners and customers to sell into.

Sure, $5.3 billion is expensive for the company’s revenue scale. But if fintech keeps growing as Visa expects it to, and Plaid can stay where it is, i.e. playing relay for fintechs and the banking world, the deal could look cheap in a few years.