For anyone who is concerned that there may be an end in sight for the wave of fintech dealmaking mega deals, you need not worry. Visa Inc.’s recent $5.3 billion acquisition of Plaid Inc. tells us the answer is negative. Experts say that VISA paid a substantial premium to buy Plaid, as one insider says, twice Plaid’s late-2018 private valuation.

After a spate of huge financial technology mergers and acquisitions in 2019, the Plaid deal shows investors that their concern that the bottom dropped out of fintech dealmaking this year is unwarranted.

However, Visa’s purchase of Plaid transfers fintech from something of a concept and out of the average person’s reach— to a more tangible tool that’s in the mainstream, said one industry insider.

Plaid is now a component of the critical infrastructure of the financial services industry.

What is Plaid?

Plaid says on its website that it is focused on “democratizing financial services through technology.” The San Francisco-based company says that it creates “beautiful consumer experiences, developer-friendly infrastructure, and intelligent tools that give everyone the ability to create amazing products that solve big problems.”

Plaid gives consumers a way to avoid using credit cards as the payment vehicle in consumer apps. As such, the company was a potential threat to VISA’s stranglehold on the credit industry. But with the help of Plaid, developers can enable apps to verify consumer’s banking credentials and accept payments directly from their bank accounts. This process is less expensive for merchants and more convenient for consumers—an uninvited development for VISA and the credit card industry.

If Fintech Dealmaking in Corporate Sights

Visa’s acquisition of Plaid is more evidence of the effort by large credit companies to expand their offerings and keep pace with fast-growing digital competition.

For example last November, PayPal Holdings Inc. acquired the online coupon company Honey Science for $4 billion. And Charles Schwab Corp. bought TD Ameritrade Holding Corp. for $26 billion. Finally, Fiserv Inc., Fidelity National Information Services, Inc. and Global Payments Inc. executed several big deals in 2019 that remade the corporate landscape of payment processing.

As evidence of the wave of fintech dealmaking, there are now roughly 60 financial technology startups that are valued at more than $1 billion, according to data from CB Insights, a research firm.

Many of these companies are now acquisition targets, experts say. They include SoftBank Group Corp.-backed unicorn Kabbage Inc. and Stripe Inc., which was most recently valued at $35 billion. At that price, it makes it one of the world’s largest startups.

Ryan Caldwell, the CEO of financial data company MX Technologies Inc., was quoted as saying that the Visa transaction could initiate a fintech dealmaking domino effect in the industry. The bigger companies were increasingly aware of fintech’s potential, he remarked, and many of these players definitely need to partner.

Added to this is the emergence of digital-first alternative banks, or “neo-banks,” which experienced a large investment in 2019. This year may also see an increase in mergers and acquisitions. There are numerous digital banking startups that fall into this category. Because many of these companies have similar business models, experts think that the industry could be ripe for buyouts.

More Fintech Dealmaking on the Way

In mid-February, FinTech LendingClub announced that it was purchasing Radius Bancorp for $185 million in cash and stock, according to a report by CNBC. However, this is the first time a FinTech company has purchased an actual bank.

There have been other FinTech startups, such as Robinhood and Square, who are reportedly looking into becoming traditional banks in an effort to improve their profits and offer customers bank-like products, like checking accounts.

But either way, fintech dealmaking is here to stay.