Visa and Plaid have ended their planned $5.3 billion tie-up after the Justice Department challenged the deal in an antitrust lawsuit.

In November, the agency sued to block Visa's acquisition of the fintech startup, claiming that it would allow the payments giant to maintain a monopoly over the online debit space. Plaid, the DOJ argued, was developing a platform that would challenge Visa.

Visa chairman and CEO Al Kelly said in a statement that he believed the companies would have emerged victorious in the legal battle since Plaid's technology was complementary and not competitive. But protracted litigation would take "substantial time to fully resolve."

Before Visa's takeover approach, Plaid had amassed more than $300 million in funding from venture investors including Andreessen Horowitz, NEA and Goldman Sachs. The startup's technology links various consumer finance apps to banks and other platforms, and Plaid became the biggest financial data aggregation company in the US, according to the DOJ. Visa's acquisition attempt was allegedly a move to eliminate that growing competition.

"Now that Visa has abandoned its anticompetitive merger, Plaid and other future fintech innovators are free to develop potential alternatives to Visa's online debit services," said Makan Delrahim, the DOJ's top antitrust official. "With more competition, consumers can expect lower prices and better services."

In a statement, Plaid CEO Zach Perret said the company would continue to work with Visa as an investor and partner, and would turn its focus toward supporting the millions of consumers that now rely on fintech. Last year, Plaid grew its customer base by more than 60% and added hundreds of banks to its platform, Perret said.

When it was announced last January, the Visa-Plaid deal was one of the largest venture-backed fintech exits on record, according to PitchBook data.

Featured image by Leon Neal/Getty Images

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