Manually linking your bank account to financial services apps can be a hassle. Conveniently, there are FinTech companies like Plaid that offers to do that for you. But is Plaid safe? Should you use them to connect to your financial institution? Here’s what you need to know.
Financial technology has become an integral part of our lives. In fact, if you’ve connected your financial accounts to any other kind of service, chances are you’ve used Plaid.
So, without us knowing it, we most likely have already shared our personal information and financial data with Plaid. So why in the world have they been sued for $58 million? More importantly, is Plaid safe to use?
What is Plaid?
Plaid is a financial technology company that acts as a middle man between your bank and any other financial services applications. They offer an important verification service.
What is Plaid bank verification?
Plaid bank verification is the process by which they authorize payments or data from your bank to be transferred to a third party without that third party having direct access to your banking information.
So, instead of giving out your personal financial data to EVERY application, you can just share it to Plaid. Usually this means giving them your bank login information and providing the permissions for them to download data such as:
- Account numbers
- Account names
- Account balances (credit, checking, loan, savings, etc.)
- Personal information (name, address, email, phone)
The company will then protect and manage your information by (supposedly) only giving out what is necessary to the apps who request it.
Is Plaid Safe To Use?
This question can’t be answered by a simple yes or no. But considering that the company has not been hacked and there isn’t any kind of Plaid security breach so far, I’d have to say that…
Yes, Plaid is safe. For now.
I have to point out though that the company has recently settled a privacy lawsuit over the alleged collection of more information than what was needed. While San Francisco-based Plaid did not admit to any wrongdoing, they did agree to delete some data, minimize new data, and give user more data control.
For those who did apply for a claim on the settlement, the payout for individuals was less than amazing.
Clearly, the justice system values our privacy.
What are the Alternatives to Plaid?
Unfortunately, there aren’t very many alternatives to using Plaid. Often, you’re stuck with whatever service the app or account you’re using allows you to use. If that’s only Plaid…that’s all you can use.
There are, however, some other options which aren’t nearly as convenient. This includes:
- Manually link your bank account. Manually linking bank accounts is often possible and requires much less information than what Plaid retrieves. It’s usually not immediate, however.
- Use a different payment method. This allows users to have more control on their data.
Should YOU use Plaid?
Here’s the reality: PLAID equals convenience, NO PLAID equals inconvenience. If you read any other Plaid reviews, that’s basically what you’ll see.
In fact, there are certain apps that won’t automatically pull your transactions unless you’re using Plaid.
In the end, it all comes down to the decision that YOU have to make between privacy and convenience and the balance between the two.
If you’re interested to learn more about the latest online privacy tips, make sure to read the secret truths VPNs don’t want you to know.
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Further Reading & Resources
FAQs
Plaid is safe to use due to its transparent privacy policies and strong security features. Plaid makes it easy to control your financial information and data, and it does its best to communicate to you which apps have access to your information.
Is it safe to use Plaid for bank account? ›
Plaid authenticates your financial information, permitting companies to transfer sensitive information securely. But is Plaid safe? Yes, it's considered safe to use.
Why does Plaid want my bank username and password? ›
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.
Is Plaid safe to use 2023? ›
Yes. Plaid was built with security in mind, and uses a wide range of ways to keep customer financial data and information safe. In fact, it's because of the extra layer of safety that many apps choose Plaid in the first place.
Why is cash app asking me to link my bank account through Plaid? ›
Connecting your bank account through Plaid ensures that your bank information is correct and that you will receive your payments without unnecessary delays due to incorrect bank account information.
Why can't I link my bank account to Plaid? ›
Your account settings are incompatible
To link your account through Plaid, update your bank settings. If you have your account set up to require a one-time passcode each time you log in, you'll need to change the settings to only require a one-time passcode for new devices.
Is Plaid accessing my bank transactions? ›
Once ownership of your accounts is verified, we securely retrieve your permissioned account information from your financial institution. We collect the data to power the services you've chosen and, when requested, securely share it with the app you're using and establish a secure connection that you control.
Does Plaid take money out of your account? ›
As a consumer, Plaid doesn't charge you to use this service. The app that's requiring the financial data to be exchanged pays Plaid a fee. Plaid's network includes more than 10,000 financial institutions that are eligible to use its service, but not all accounts are eligible for connection through Plaid.
What happens if my bank doesn't use Plaid? ›
If you are unable to find your bank institution on Plaid, you will need to manually enter your bank account and routing numbers. This will allow Plaid to verify your account using micro-deposits in order to set up direct deposit.
Can I unlink my bank account from Plaid? ›
You can delete financial accounts you've connected using Plaid through Plaid Portal at any time. This will delete this data from Plaid's systems and prevent any connected apps from accessing any additional data via Plaid for these accounts going forward.
What are the Alternatives to Plaid?
- Manually link your bank account. Manually linking bank accounts is often possible and requires much less information than what Plaid retrieves. It's usually not immediate, however.
- Use a different payment method. This allows users to have more control on their data.
How do I opt out of Plaid?
- Login to the Stash app.
- Tap your initials (iOS) or hamburger icon (Android) in the upper-left corner.
- Tap Manage external bank account.
- Follow the prompts to link another account using manual verification.
Does Plaid charge a fee? Plaid is free for consumers using a Plaid-powered app. Plaid does not charge consumers for using our services.
What banking apps don t use Plaid? ›
Cash Advance Apps That Don't Use Plaid
- B9 Advance. B9 Advance is a membership-based cash advance app that allows you to access up to 100% of your paycheck instantly once your account is set up. ...
- CashMaster. ...
- Line. ...
- DailyPay. ...
- Dave.
Venmo uses Plaid to verify your bank account information and, periodically, your bank account balance to check if you have enough funds to cover certain transactions.
Why is Cash App making me use Plaid? ›
In order to link a bank account to Cash App
Plaid is used by a variety of financial services providers, including Cash App, to help streamline the process of linking bank accounts and facilitating transactions. Plaid partners with a number of banks and financial institutions in order to provide its services.
Do I have to link my Cash App to Plaid? ›
Using the Cash app without Plaid
There are two ways in which you can connect your bank account with the cash app without using Plaid. Either you can fill in your bank details manually. You must enter your bank routing number, bank name and address, username, and password.
Why is Plaid connected to my account? ›
When you connect your financial data to an app or service, they pay Plaid. For example, when you add a bank account to Square Cash, they pay us a fee. Plaid is free for everyone who uses a Plaid-powered app, allowing you to securely connect your bank account to the apps you want in just a few seconds.
What bank is wisely on Plaid? ›
The Wisely Pay MasterCard and Visa cards are issued by Fifth Third Bank, N.A., Member FDIC, pursuant to a license from Mastercard International or Visa U.S.A. Inc.
What banks does Plaid work with? ›
What's an API aggregator?
| Name | APIs | View |
|---|
| Barclays | 9 | View |
| BBVA | 9 | View |
| CaixaBank | 3 | View |
| Cajamar Caja Rural | - | View |
19 more rowsHow do I delete my Plaid Portal account?
- Log in to your Plaid Portal account.
- In the upper-left of your Plaid Portal account, click the three horizontal lines to expand the menu.
- At the bottom of the menu, click Settings.
- Select Delete Plaid Portal account.
Plaid provides the following endpoints to access statement information: /statements/list : Retrieve the download URLs for the available bank statement PDFs utilizing the access token. /statements/download/ : Download a single bank statement in PDF format.
What credentials is Plaid asking for? ›
You'll be asked to enter the login credentials (typically your username and password) that you use when accessing your account through your bank's official website. Plaid will never ask for your debit/bank card PIN.
What information does someone need to access your bank account? ›
Once they have your personal information (such as your ID, Social security number, etc.), they can steal your identity and access your bank account. If you're on the job hunt, it's a good idea to set up fraud and credit monitoring to make sure no one is using your credentials for the wrong reasons.
What happens when you disconnect Plaid? ›
This will prevent the app from accessing any additional data via Plaid going forward, but may not remove data you've already shared with the app and that the app has already stored in their systems. To make sure data is deleted from the app, we recommend contacting the app's support team directly.
Who owns Plaid banking? ›
Plaid was launched by William Hockey and Zach Perret in 2012 and is headquartered in San Francisco, California.
Does PayPal use Plaid? ›
PayPal uses Plaid as an intermediary, to securely share your details and help to process payments. PayPal is already known to be a secure and reliable way to pay and transfer money.
How many banks is Plaid connected to? ›
Users simply enter the login credentials associated with their account. Link provides a single, streamlined solution that connects to more than 12,000 US financial institutions, plus many more in Canada, the UK, and Europe. There are more than 8,000 financial apps and services that are powered by Plaid.
How long does it take Plaid to verify your bank account? ›
Plaid makes a micro-deposit and automatically verifies the deposit in as little as one to two business days. Same Day Micro-deposits (US only): User enters account and routing numbers. Plaid makes a Same Day ACH micro-deposit and the user manually verifies the code in as little as one business day.
Should I change my password after using Plaid? ›
Yes, your login credentials belong to you and you can change them whenever you like. However, changing your login credentials will prevent Plaid from accessing and sharing your account activity with us. If, in the future, we need to review your bank statements, you may be asked to reconnect to Plaid.
The short answer is yes, it's safe to link bank accounts. Linking bank accounts is as safe as any other banking activity. The level of security provided depends on your bank or credit union.
Does Plaid change the account number? ›
Plaid's unique identifier for the account. This value will not change unless Plaid can't reconcile the account with the data returned by the financial institution. This may occur, for example, when the name of the account changes. If this happens a new account_id will be assigned to the account.
Which bank details are safe to give out? ›
It's generally considered safe to give out your account number and sort code, but you should always use common sense and avoid sharing your bank details with people you don't know or expect payments from.
How does Plaid make money? ›
Plaid Inc. makes money through transaction services. The company charges a fee for every successful transaction. This fee is usually a percentage of the total amount of the trade and varies depending on the volume and type of transaction made.
Do you have to give Plaid your bank username and password? ›
In many cases, after you request that we link your financial institution to an app or service you want to use, you will be prompted to provide your login credentials to your financial institution, and, upon successful authentication, your financial institution will then return your data to Plaid.
How do I see what accounts are connected to Plaid? ›
You can view and manage the app connections you've made using Plaid through Plaid Portal. With Plaid Portal you can see the types of data shared with each app, disconnect apps from your financial accounts any time you want, and delete data stored in Plaid's systems.
How does Plaid verify accounts? ›
Plaid is an app and API that securely connects users' bank accounts with third-party applications. It verifies bank accounts by securely retrieving financial data from the user's bank using their login credentials.
Can I use Venmo without Plaid? ›
If you can't use Plaid for any reason, you can still link an account to Venmo manually. Here's how: Select Manual Verification instead of Instant Verification when prompted. Enter your account and routing number, following the onscreen prompts.
How long does a Plaid transaction take? ›
Plaid will make a deposit that will post within one business day (using Same Day ACH, which is roughly two days faster than the standard micro-deposit experience of two to three days). Users are instructed to manually verify the code in the transaction description deposited in the account.
How do I manually link my bank account to Plaid? ›
Mobile
- Tap on “Settings”
- Select “Linked Accounts”
- Tap “+” to add a new account.
- Select “U.S. bank account” and choose “Use bank login credentials”
- Review the Plaid requirements and select “Continue”
We have compiled a list of solutions that reviewers voted as the best overall alternatives and competitors to Plaid, including Codat, Stripe Connect, MX, and Flinks.
Should I trust Plaid? ›
Our information security program is designed to meet or exceed industry standards, and we use many different controls to keep your personal information safe. Plaid is certified in internationally-recognized security standards, like ISO 27001, ISO 27701, and is SSAE18 SOC 2 compliant.
What is the Plaid controversy? ›
In 2021, Plaid settled a $58 million class action lawsuit over claims that it passed on personal banking data to third party firms without user consent. The settlement encompasses five separate lawsuits combined as one.
Is Zelle safer than Venmo? ›
Zelle transfers money directly to and from FDIC-insured bank accounts, so you know the funds you send or receive are protected up to $250,000 per account. If you're the type of person who likes to leave funds sitting in your Venmo account for ease of transfer, and the service is hacked, you could lose that money.
Does Plaid ask for bank password? ›
In many cases, after you request that we link your financial institution to an app or service you want to use, you will be prompted to provide your login credentials to your financial institution, and, upon successful authentication, your financial institution will then return your data to Plaid.
Why is Venmo asking me to use Plaid? ›
Venmo uses Plaid to verify your bank account information and, periodically, your bank account balance to check if you have enough funds to cover certain transactions.
Should I let Venmo use Plaid? ›
Is it safe to use Plaid on Venmo? Plaid is safe to use.
What can Plaid see on my bank account? ›
What data does Plaid access from my financial institution?
- Account holder information: name, address, phone number, and email address, as held by your bank or other financial institution;
- Account transactions: amount, date, type, and a description of the transaction; and.
To disconnect, follow these steps:
- Click on the gear icon in the top left corner.
- Then click on Bank Connections.
- Click on the bank itself to show the connected accounts.
- Next to the account you want to remove, click on the Disconnect link.
If you are unable to find your bank institution on Plaid, you will need to manually enter your bank account and routing numbers. This will allow Plaid to verify your account using micro-deposits in order to set up direct deposit. Plaid will match your information with what is on file at the financial institution.
How do I opt out of Plaid?
- Login to the Stash app.
- Tap your initials (iOS) or hamburger icon (Android) in the upper-left corner.
- Tap Manage external bank account.
- Follow the prompts to link another account using manual verification.
Plaid is very secure. They rely on some of the following technology in order to upkeep their strict security protocols: MFA, or multi-factor authentication, is a way to keep your account's login safe. It also prevents any unauthorized logins by using 2 or more factors to authenticate you.
Is it safe to link bank accounts? ›
The short answer is yes, it's safe to link bank accounts. Linking bank accounts is as safe as any other banking activity. The level of security provided depends on your bank or credit union.
