December 2: What does Plaid do?

Plaid acts as an intermediary between apps (like Venmo) and your bank so that you can log in and share data securely.

Source: Justin Gage
Published: January 2021

What does Plaid do?

Plaid acts as an intermediary between apps (like Venmo) and your bank so that you can log in and share data securely.

• As more personal finance apps (think Robinhood, Wealthfront, Coinbase) pop up, developers need ways to connect to and access your bank accounts 

• That connection is notoriously difficult—each bank has its own idiosyncratic APIs, legacy architectures, and ugly UX

• Plaid provides a connection layer for developers to easily connect to and work with bank accounts, and a simple UI for users like you to log in 

Before Plaid existed, we used micro-deposits to verify bank accounts. Remember when you’d have to enter that $0.02 and $0.07 was deposited into your account? With Plaid, the connection is instantaneous instead of having to wait days.