Visa has announced that it intends to acquire banking-as-a-service (BaaS) infrastructure provider Pismo for a USD 1 billion cash deal. Pismo has raised a total of USD 118 million in funding, with the most recent raise in October 2021. The deal remains subject to regulatory approvals and customary closing conditions, and should be closed by the end of the year.

By acquiring Pismo, Visa intends to enhance core banking and issuer processing solutions, across debit, prepaid, credit, and commercial cards via APIs. Pismo also enables Visa to provide support and connectivity for emerging payment rails for their FI clients. 

Pismo will retain its current management team, although its 400+ employees will become Visa employees. The startup has seen strong growth; it now processes nearly 50 billion API calls and USD 40 billion in transaction volumes per annum (from less than USD 1 billion per month in early 2021). The platform also covered almost 80 million accounts with over 40 million issued cards.

Analyst QuickTake: Visa has entered large acquisitions in the FinTech infrastructure space in the past. Last year, the company acquired Tink for around EUR 1.8 billion (~USD 2.2 billion). Moreover, the industry as a whole has seen consolidation in the recent past with several acquisitions. Some key acquisitions earlier this year include Socure acquiring Berbix , Bankable acquiring Arex Markets , FIS acquiring Bond , Embedded Finance Ltd acquiring Railsr , and Marqeta acquiring Power Finance .