If you’re using financial services such as Venmo Betterment,, Venmo need a Budget or Robinhood You’re among four American adult users of an extremely advanced technological innovations in the world of finance: Plaid. Plaid connects your bank accounts to a variety of software and applications , and is fast becoming a household word.
When using any software that can access sensitive financial information, users are interested in knowing exactly how their data is used , and they need an assurance that their funds are secure. This article will help you learn about Plaid and the way it protects your bank’s information safe.
What is Plaid?
Plaid is a finance service firm that helps you securely connect your bank account to third-party finance apps, creditor and small business lending. This service allows your company’s bank account to securely connect and transfer information to smart applications on phones, like loans, financial products, or banking apps. Plaid is utilized by more than 11,000 financial institutions as well as services to allow customers to manage, move and invest their money using a smartphone.
How Does Plaid Work?
For instance, you could make use of Plaid in order to link to your Chase credit or bank account. If you’re required to provide your bank details to another financial app then you’ll get prompted by the Plaid window.
You’ll need to enter the details of your Chase login and username, and then complete the form. The information you enter is only available to Plaid who will then contact Chase to verify your login details. If you’ve setup 2-factor authentication (2FA) then you’ll be required to enter the information. Plaid offers the option to utilize its own 2FA option if your bank does not support this additional security layer.
Once you’ve utilized Plaid for authenticating your bank account information The connection is now in place and is utilized to transfer financial data you have authorized. It could be data like the history of transactions, balance or other details. Platform for installing installment payments Sezzle is a finance company which has recently announced it has partnered with Plaid to authorize financial transactions. With the help of this collaboration, Sezzle customers will be in a position to connect their financial accounts through Plaid. This will enable them to pay more effectively by using Automated Clearing House (ACH) instead of a debit or credit card.
Is Plaid Secure?
It’s always a good idea to investigate any new company or platform before you agree to share the information about your bank account with a third-party. Plaid is a form of software that allows you to transfer your bank account data to financial institutions that are not yours as well as to creditors and applications. Plaid employs a multi-layered strategy to ensure the security of all its users. This includes:
Make use of Multifactor Authentication (MFA) to protect your account even if your financial institution doesn’t provide it.
Uses a bug bounty programme3 to increase the number of eyes upon security in Plaid;
We promise to never share your personal data without your consent and not to give or lease your personal information to third parties;
You can control who has access to your data as well as the data that can be disclosed to each organization.
Is Plaid Safe to Use?
Like most businesses that transfer financial information, Plaid says it takes the security of customer data extremely seriously. Plaid employs encryption protocols such as that of the Advanced Encryption Standard (AES 256) and Transport Layer Security (TLS) when sending financial information. Being aware that your information is encrypted through these security settings can add an extra assurance.
In addition to implementing the best-in-class security protocols for handling data, Plaid follows a number of other best practices in security to ensure that your data is secure. The Plaid’s Trust and Safety page details that it:
- Make use of the multifactor authentication (MFA) to secure your account in the event that your financial institution doesn’t provide it.
- It has a bug bounty program3 to increase the number of eyes over security issues at Plaid;
- The company promises to never share your personal data without your consent and not to offer or lease your data to third parties;
- You can control who has access to your information and the data that can be disclosed to each organization.
How do you ensure that Plaid keep your information private?
You have control over every aspect of your personal data via Plaid. Plaid platform. You determine what information Plaid can provide to applications, such as:
- Numbers for routing and account numbers for routing and account
- Holdings in investments
- Balances on credit cards and interest rates
- Student loans
- Account profile information
Plaid’s privacy policies state that they will not share or rent personal information about you and will only share information with companies that you’ve given permission to.
The most popular Plaid applications for individuals and companies
Plaid is the powerhouse behind more than 3000 finance applications, with the following applications that you might already be using:
- You Need a Budget
There’s a good chance that any app you’re using that is connected to your credit or bank accounts are using Plaid, or likely to be in the near future. Plaid is secure and reliable. It was specifically designed for businesses and customers who wish to safe and secure access to their finances completely effortless.
The Bottom Line
Plaid is an fintech business that is used by over 4500 companies to connect customers to financial services from third-party companies. That comprises Venmo, Acorns, American Express, Betterment, and numerous other top players in the world of finance. If you are using Plaid using a third-party app you sign in by using those login credentials to your bank. The third-party application does not see your password or username, instead it receives only a notification that the login has been successful and after that, whatever data you let it see.
Although you might be wary to let an outside business with your personal financial details, Plaid claims to take security very seriously. Plaid doesn’t rent or sell the financial details of its customers and provides users with full control over the information that is shared with any company.