Plaid (plaid.com) is a North American fintech company. It is a platform that was made to make it easier for your bank accounts and financial apps that need your banking information to talk to each other.
The software from Plaid acts as a direct link between your bank accounts and third-party apps and websites that deal with money.
These apps and websites can only work if they can get real-time access to your personal financial information.
It makes sure a secure connection is made and gives you the choice to share only the information you need with third-party apps.
At the same time, it makes sure that your login information for your bank stays safe.
Read more: See the best bank promotions here…
How To Use Plaid
Plaid lets you connect your personal financial information to tens of thousands of apps and services. It’s easy to do, and you have some control over who can see your data at any given time.
Plaid is used by a number of apps for financial services, budgeting, and portfolio management. For these apps to work correctly or make good suggestions, they need access to accurate financial information in real time.
Read more: See the best personal finance apps…
Once you’ve downloaded the third-party app you want to use, Plaid will ask you for the username and password for the account you want to link to that app.
After getting the login information you gave, it gets the financial information the third-party app needs and encrypts it (such as account balance or credit card information, for example).
This data is sent to the third-party app through an application programming interface (API), where it is decrypted. Plaid goes above and beyond to protect sensitive information by making sure it only sends the information that the third-party app needs.
What Is Application Programming Interface (API) All About?
An Application Programming Interface (API) is built into applications, even website applications.
It basically makes a virtual platform for transferring data between one site or app, like your bank’s website, and third-party sites or apps, like your favorite financial planning or budgeting app.
The idea behind APIs is to make it easy for websites and apps to connect and share data without any problems.
Once the API connects the two sites, users like you would give Plaid your account login information so that secure data sharing can begin.
So, it lets app developers make sure that their product works with all Plaid apps and websites without having to figure out how to connect to each one separately.
Why Plaid Needs To Connect To Users’ Bank Accounts
For instance, if you want to use financial apps like Acorns or Venmo, you have to give the app access to your bank accounts.
Plaid is there to act as a virtual middleman and make sure that your financial information is sent to the apps or websites you choose in a safe way.
The secure connection lets you get to the information you need about your finances without having to go to your bank’s online banking app or website each time.
It could look at your account history, your account balance, your routing number, or even your account numbers, which are needed to make deposits or withdrawals.
All information that is collected is encrypted before it is sent, so that everything is always safe.
Is It Safe To Use Plaid?
When a website or app asks for your financial information or other sensitive information, it’s normal to hesitate (and sensible). Scammers are always hard at work, so you should always be careful about giving out your financial information.
It has taken a lot of steps to make sure you feel as safe as possible when you use its platform.
Here are some examples of the things they’re doing right now:
- Plaid will only share data with apps or websites you grant it access to
- Plaid allows you to decide what type of data will be shared with your selected apps or websites
- Their data encryption system protects all information being transferred, be it your bank accounts, financial institution information, and any other application or website data
- 24/7 monitoring and support available across the board
- Their cloud infrastructure was built with security in mind and developed over decades, offering the most responsive yet flexible data protection possible
- Clear privacy policy stating that Plaid will never rent or sell you data
- Plaid is certified in internationally recognized security industry standards like ISO 27001; ISO 27701 and is also SSAE18 SOC 2 compliant
- Plaid’s Bug Bounty Program is set up to find and resolve any potential vulnerabilities in their system by offering rewards to third parties that find bugs
Is Plaid Really Secure?
As with PayPal or the Visa network, which also deal with sensitive financial information, there is always an element of risk.
Plaid tries its best to be clear about its services and policies. On plaid.com, you can read about all of the company’s security measures.
Since it wants to stay on the cutting edge of financial technology, it uses security measures like:
- Encryption protocols like the Advanced Encryption Standard (AES 256) on both sides of the data transfer
- Transport Layer Security (TLS) when transmitting your financial data
- Multi-factor authentication to keep your login secure
Users should feel more confident knowing that their data is sent using these best-practices-based security protocols.
How Does Plaid Protect The Privacy Of Its Users?
You have full control over what information is shared through Plaid’s platform. You choose what information to share, with whom to share it, and when to stop.
In its privacy policy, Plaid also says that it will never rent or sell your information to a third party.
You can decide whether to let Plaid share:
- Your account profile information
- Bank information
- Transaction history
- Account numbers
- Routing numbers
- Loan payment status
- Credit and debit card balances
- Investment holdings
It knows that your privacy is important to you. So, the company made a portal where users can control and manage the data they share across multiple apps and sites.
Signing up for the Plaid Portal and logging in will give you access to all your information sharing data and permissions.
You can also ask for your data to be deleted, which is another feature of the portal.
Does Plaid Cost Anything?
Plaid is free for everyone to use. When you connect your Plaid account to a third-party app or website like Coinbase, Betterment, or Venmo, the app or website pays Plaid a fee for the connection.
Which Businesses And Banks Use Plaid?
Plaid is the company behind more than 4,000 financial apps and websites, some of which you may already use. It also helps connect more than 11,000 financial institutions.
Here are some examples of the most well-known companies and financial institutions that trust Plaid to make their connections easier:
- Mobile Banking Apps like:
- Savings, Wealth Management, and Investment Apps like:
- Instant Payment Apps like:
- Personal Finance Management Apps like:
- Money Lending and Loan Application Apps like:
Plaid is a platform for sharing financial information that has been growing since its start in 2013. It has thousands of users every day. The company works very hard to make sure that its processes are as clear as possible.
Plaid Frequently Asked Questions (FAQs)
Most of the time, you wouldn’t talk to Plaid directly through their website. Instead, you would use a third-party app or website.
Once you’ve downloaded and set up the app, you can start linking your personal or business accounts to it. It will show you how to use the Plaid platform to connect your accounts to the app you want.
Once you’ve linked your bank accounts to an app or website, Plaid will send that app or website the information it needs.
The kind of information shared between Plaid and the apps or websites you choose to use depends on how you set up the connection.
It won’t share your information with other apps or services unless you tell it to. Your data will only be sent to apps and sites that you connect to directly.
Once you have linked your financial accounts to a third-party app or website, Plaid will access your financial information on your behalf.
It acts as a go-between for your bank or other financial institution and the app or website you want to use.
Plaid can access and share different kinds of information depending on the app or website. These types of information may include:
Personal information such as your name, address, email address, or phone number
Banking history such as transaction data or loan history
Account information includes your account types, routing numbers, balances, or credit limits.
To get into the Plaid Portal, you can make an account. With this account, you can see a list of all the apps and websites to which you’ve given access to your personal financial information.
You can also stop apps and websites from getting access to your account information through this portal. You can also ask Plaid to delete your financial information through the Plaid Portal.
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