Visa has invested in data security firm Very Good Security (VGS), just days after its $5.3 billion acquisition of Plaid was confirmed.
The undisclosed strategic investment from Visa will be used to widen access to VGS’s infrastructure-as-a-service to fintechs and large enterprises.
Visa joins Goldman Sachs, Andreessen Horowitz, Vertex Ventures US and Max Levchin as an investor in VGS.
The investment follows Visa selecting VGS as a launch partner earlier this year for its Fintech Fast Track programme.
Kevin Jacques, vice president of Visa Ventures, explained why VGS was an attractive investment: “As a global leader in payments, we continue to invest in and partner with companies that provide valuable capabilities for our clients and for the network.”
“VGS’s ‘Zero Data’ platform is an example of this. Companies can reduce the scope of their data security and compliance requirements by eliminating the sensitive data in their systems, enabling them to develop innovative ways to pay without compromising security or functionality.”
Mahmoud Abdelkader, chief executive officer and co-founder of VGS, commented: “This investment from Visa further signals a shift around how companies think about protecting sensitive data. We’re excited to continue de-scoping customers’ applications from ever having to handle sensitive data, enabling them to go to market faster and making it easier to partner with large financial institutions.”
It’s been a busy month for Visa, with its $5.3 billion acquisition of Plaid, which connects financial accounts to multiple apps, confirmed on 13 January.
Plaid products enable consumers to conveniently share their financial information with thousands of apps and services, including Acorns, Betterment, Chime, Transferwise and Venmo.
Today, one in four people with a US bank account have used Plaid to connect to more than 2,600 fintech developers across more than 11,000 financial institutions, according to Visa.
Visa said the Plaid acquisition will open up new market opportunities for the company in both the US and internationally, and provide the opportunity to deliver enhanced payment capabilities and related value-added services to fintech developers.
The acquisition will also enable Visa to work more closely with fintechs through all stages of their development and drive growth in its core business.
Al Kelly, chief executive officer and chairman of Visa, said: “We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business. Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers.”