Plaid, a fintech newcomer-turned-behemoth, has become the go-to company connecting consumers’ bank accounts to online payments for big-name companies like Venmo, Robinhood, Coinbase (and NachoNacho!). The Plaid API adds a lot of value to both vendor companies and the buyers connecting to them, because, under the hood, it does the difficult work of coordinating all the complicated and sensitive banking information necessary to link accounts to apps. One company spokeswoman described Plaid as similar to a travel power adapter that allows you to plug in your hair dryer to a foreign outlet without having any problems.
And clearly there’s been a lot of demand for this ‘adapter.’ Plaid connects over 11,000 banks with more than 200 million consumer accounts, and these numbers jump by huge margins each year. Plaid’s technology and stance in the market are so strong and promising that, until today, Visa had been planning to acquire Plaid for $5.3 billion. The only reason the deal didn’t go through is because the United States Department of Justice classified Plaid as such a powerful competitive threat to Visa that giving Visa control over it would create a monopoly.
But Is It Safe?
So Plaid is obviously a huge player in the fintech and payments space, but just because something is big and popular doesn’t necessarily mean it’s safe for a consumer to use. Thankfully in this case, Plaid maintains strong financial security as well. The company’s technology has been successfully used without issues since 2013.
They use a plethora of techniques to secure users’ financial data: AES and TLS data encryption, Multi-Factor Authentication to block unauthorized access, and constant monitoring and customer service. Furthermore, being in the spotlight for so long has subjected Plaid to countless stress tests to uncover and fix any possible bugs or security weaknesses. Plaid users choose the specific data they want to share with the application they’re trying to connect to, and no data is ever shared with outside parties.
So, in short, Plaid is quite safe. It’s a large company trusted by an enormous swath of businesses and consumers with strong security standards and protection measures in place. When you want to use Plaid to connect to apps like NachoNacho and make payments, you can rest assured that you’re using a safe and secure tool.