In a major fintech merger and acquisition deal, credit card giant Visa has acquired Brazilian payments infrastructure startup Pismo for a staggering $1 billion in cash. This deal stands as one of the largest in the fintech industry so far this year.
Founded in 2016, Pismo has rapidly established itself as a key player, catering to prominent clients such as Citi, Itaú, Revolut, and Nubank. With an impressive track record of processing nearly 50 billion API calls and facilitating over $40 billion in transactions annually, Pismo’s cutting-edge technology powers millions of accounts and issued cards. Initially focused on the Brazilian market, Pismo has expanded its operations across Latin America, including Mexico and Chile, as well as into the U.S., Europe, and other regions such as India, Southeast Asia, and Australia.
Pismo’s cloud-native platform, which encompasses issuer processing and core banking services, has been widely acclaimed for its flexibility and agility. It enables banks, fintech, and other financial institutions to launch a range of products related to cards, payments, digital banking, digital wallets, and marketplaces. Pismo’s platform also empowers financial institutions to leverage their core data intelligently.
Visa’s acquisition of Pismo aims to strengthen its core banking and issuer processing capabilities, offering comprehensive solutions encompassing debit, prepaid, credit, and commercial cards through cloud-native APIs. Moreover, Pismo’s platform will facilitate Visa’s support and connectivity for emerging payment rails, such as Brazil’s Pix, for its financial institution clients.
Jack Forestell, Visa’s Chief Product and Strategy Officer, expressed enthusiasm about the acquisition, stating that it will enable Visa to deliver more innovative issuer solutions to financial institutions and fintech clients. The deal is expected to be finalized by the end of the year, pending regulatory approvals and customary closing conditions. Pismo’s current management team will continue to lead the company from its headquarters in São Paulo.
During its funding rounds, Pismo secured $108 million in Series B funding, with SoftBank, Amazon, and Accel as key investors. With this latest acquisition, Visa aims to enhance its collaboration with banks and financial institutions by providing a broader range of core banking and card issuing services alongside its credit and debit card offerings.
The strategic move by Visa demonstrates its commitment to strengthening its infrastructure capabilities. Notably, Visa completed its $2.15 billion acquisition of Tink, a leading European fintech startup focused on open banking APIs, in March 2022. Additionally, Visa’s planned acquisition of Plaid, a U.S.-based open banking startup, was halted due to regulatory challenges.
Visa’s acquisition of Pismo is a significant development for the Latin American region, which has witnessed a surge in global investors’ interest. It also marks a remarkable turnaround for Pismo, as the company faced financial difficulties in 2019, ultimately leading to the founders selling their personal vehicles to support the business. Now, Pismo’s workforce of over 400 employees will become part of Visa’s global team.
This deal also highlights Accel’s knack for acquiring financial infrastructure companies that subsequently attract significant acquisition interest. In 2020, consumer financial services platform SoFi acquired Galileo, a payments and bank account infrastructure company, for $1.2 billion in cash and stock. Accel’s investment played a pivotal role in Galileo’s growth and subsequent acquisition.
Overall, Visa’s acquisition of Pismo signifies a significant milestone in the fintech industry, further cementing the company’s position as a global leader. By integrating Pismo’s advanced technology and capabilities, Visa aims to deliver enhanced solutions and drive innovation in the rapidly evolving financial services landscape.