Visa is making a big acquisition (subject to regulatory approval) and is taking over Pismo for 1 Billion US-Dollars in cash. Pismo is headquartered in Brazil and is active in South America, Europe and Asia. However, the majority of their customers and revenue are from South America.
Pismo is offering core banking and processing services, and their customers include traditional banks (e.g. Citi, Itaú), neobanks (e.g. Nubank, N26, Revolut) and marketplaces (e.g. Falabella). Visa highlights that the acquisition will allow them to increase their offerings around core banking and issuing processing (incl. debit, prepaid, credit and commercial cards), as well as add emerging payment rails to their platform. The most important payment system is PIX, the Brazilian instant payment system (comparable to UPI in India).
Strategic investments and acquisitions like this one are vital for companies like Visa. Only regulated companies (e.g. banks) can work with Visa (and MasterCard), thus, the number of potential customers is limited (but not small). The card schemes have become fairly active with strategic investments in infrastructure providers that are selling directly to unregulated companies (e.g. Visa's investment in Railrs and Solaris). This gives them not only insights but can also be used as leverage to become the preferred scheme for those service providers. The acquisitions of the card schemes often serve the purpose of acquiring products they could not build themselves on a certain scale or that are competitive with their core products. This means that the deal size for acquisitions is often in the range of one billion US-Dollar or even higher, like for CurrencyCloud, Tink and now Pismo.
