Payment solutions provider Visa and fintech company Plaid have called off their merger plans originally announced in January last year.

What Happened: The U.S. Department of Justice had filed a lawsuit to stop the $5.3 billion merger deal in November — claiming that the transaction would eliminate healthy competition from the online payments market. Both the companies and the federal body have agreed to dismiss any litigation, and the Justice Department has also filed a joint stipulation of dismissal. A hearing that was scheduled for June is canceled.

“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,” Makan Delrahim, the assistant attorney general of the Justice Department’s antitrust division, said in a statement. “With more competition, consumers can expect lower prices and better services.”

Why Does It Matter: The Justice Department had originally raised objections to the deal, dubbing it an attempt by Visa to stifle competition. The federal executive department claimed that Visa’s monopoly in the online payments market could have been challenged by Plaid’s fintech platform.

Visa CEO Al Kelly maintained that Plaid’s offerings complement Visa and are not competitive but said that “protracted and complex litigation will likely take substantial time to fully resolve.”

Plaid CEO Zach Perret remarked that the fintech company would work with Visa nevertheless, in the capacity of an investor or partner, to develop the fintech infrastructure.

Price Action: Visa’s stock closed Tuesday at $208.86, 1.87% lower.

This story originally appeared on Benzinga.

 © 2021 Benzinga does not provide investment advice. All rights reserved.

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