If you use financial services like Venmo, Betterment, You Need a Budget, or Robinhood, you’re one in four American adults already using one of the most innovative financial technologies today: Plaid. Plaid is used to connect your bank accounts to various software and applications and is quickly becoming a household name.
With any software that accesses sensitive financial data, customers want to know exactly how their information is being used and they want a firm guarantee that their money is secure. Here’s everything you need to know about Plaid and how it keeps your bank information secure.
What is Plaid?
Plaid is a fintech company that acts as an intermediary link between your bank account and financial apps. When you link your bank accounts to an application that uses Plaid, Plaid takes the account logins you provide, encrypts the financial data requested (such as an account balance), and then supplies it to the application with a secure connection. Plaid obscures your login data to protect you, only sharing the information that you choose.
Plaid provides a way for you to seamlessly link your bank accounts for over 3,000 different financial services while maintaining total security and control using a secure API.
What is an API?
API = Application Programming Interface
An API is a feature of your website or application server which works between other sites and applications. Essentially, APIs talk to other applications to link up data, without having to leave your site, (think Google calendar links or jumping to your bank’s website).
Plaid’s API allows countless applications to link bank accounts seamlessly. Developers simply request Plaid’s API keys and then create a free account to utilize these keys to link financial information safely and quickly—as consumers, developers, or curious experimenters.
Why does Plaid ask to connect to my bank account?
Plaid connects to your bank account so that it can create a secure connection between your financial institution and the applications that need financial information. Plaid uses that connection to your bank account to pull out whatever data your financial applications need while still protecting your sensitive information. Plaid may pull out data like your account balance, or account numbers needed for deposit or withdrawal, but it does so using encrypted, protected tokens to shield your actual account information.
Is Plaid safe?
Many consumers are concerned about allowing access to their bank accounts, and with good reason. You want to keep your finances secure, so you might hesitate when an application asks for your bank account information. But when Plaid asks—you can connect with confidence.
One fintech founder compared using Plaid to any other online financial choice, such as online shopping with Amazon. “Each time you hit the order button and implicitly believe that what you ordered will actually be delivered, you are showing trust.” There is always some risk online, but users should be able to move forward with trust.
How does Plaid maintain your privacy?
You can control every single detail of your personal information through the Plaid platform. You decide what Plaid can supply to applications, including:
- Account and routing numbers
- Balances
- Transactions
- Investment holdings
- Credit card balance and interest rates
- Student loans
- Account profile information
Plaid’s privacy policy states that they will never sell or rent your personal information, and they only share data with the companies you’ve allowed permission.
How secure is Plaid?
Even when a company promises to keep your financial data private, there is still the concern about security. Is your data safe from cyber attack or breach? Plaid takes care to ensure that your information stays secure from malicious attempts to access and steal assets and access.
Plaid relies on the following to maintain tight security:
- Data encryption protects information coming from all sides of a transaction—banks, applications, and customers. Advanced Encryption Standard (AES) is used for any stored data, and Transport Layer Security (TLS) protects any data that is in transit between applications.
- Plaid uses cloud infrastructure that was built with security in mind, utilizing security technologies that have developed over decades to provide the most flexible and responsive protection.
- Multi-factor authentication (MFA) is used to protect your identity and keep logins safe and to prevent unauthorized logins to your account.
- 24/7 monitoring allows you instant support for any potential issues.
- Independent security testing is used by all trustworthy tech companies, and Plaid is no exception. Plaid uses outside testing and a bug bounty program to keep their platform ironclad.
In short, using Plaid gives you greater control over your finances without compromising safety.
What companies and banks use Plaid?
Who uses Plaid?
- More than 3,000 apps
- More than 10,000 financial institutions
- 25% of US adults
Popular Plaid apps for individuals & businesses
Plaid powers over 3,000 finance applications, including a handful you might already use:
- Acorns
- Betterment
- You Need a Budget
- Robinhood
- Upstart
- Dave
- Pillar
- Venmo
- Coinbase
- Carvana
- EllieMae
It’s likely that any application you’re using that connects to your bank or credit accounts is using Plaid—or will be soon. Plaid is safe, reliable, and designed for customers and businesses who want to make secure financial access totally seamless.