Visa will not buy the U.S.-based fintech service aggregator Plaid due to an anti-trust claim of the U.S. Department of Justice.

VC.ru reports with reference to WSJ that the companies have already announced the termination of the agreement.

Visa agreed the purchase of the startup for USD 5.3 billion in January 2020, but the Justice Department sued to block the deal in November, alleging the acquisition would allow Visa to unlawfully maintain a monopoly in the online debit-card market.

Plaid, the government argued, was a nascent but important competitive threat to Visa, and eliminating that threat would lead to higher prices, less innovation and higher entry barriers for online debit services.

Initially, Visa intended to challenge the Justice Department’s claim and the court scheduled a trial for June, but in the end the company declared the proceedings were taking too long.

Representative of the Justice Department’s Antitrust Division Makan Delrahim has said that the termination of the deal is beneficial for consumers: Plaid and similar fintech services are free to develop potential alternatives to Visa’s online debit services. “With increased competition, consumers can expect lower prices and better services,” he said.

Although the Justice Department did not approve Visa’s deal with Plaid, in November, it allowed Mastercard to buy a similar startup, Finicity. According to the Justice Department, the share of Mastercard in the online debit market is much smaller than that of Visa.

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