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Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

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Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#171

Post by dexterous »

CamelCaseName wrote: post #9
paxys wrote: post #3

It would have gone through had Visa's CEO not been so honest at the time of the merger announcement saying that they intended to use Plaid's data to get a leg up on their competitors. > The DOJ cited Visa CEO Al Kelly’s description of the deal as an “insurance policy” to neutralize a “threat to our important US debit business.”

Such a poor comment from Kelly that I almost wonder if it was intentional.

Hubris enables people, especially "smart" people, to do things that look really stupid in hindsight.

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#172

Post by themacguffinman »

desireco42 wrote: post #87

I am surprised Plaid is a business. It is a bunch of scripts of dubious security. How businesses are coming on board with that is worrisome. On the other hand, if we could have standard API and let people integrate services, totally welcome that. But let's not pretend this is anything like that. If you know something more, please educate me.

Consider it market proof of how much demand there was for API integration that this suboptimal hack was viable. "Proper" APIs will follow; For example, Fidelity built a proper system (Fidelity Access) in response to all the screen scraping. The Fed is now also standardizing some kind of API I think.

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#173

Post by dexterous »

PragmaticPulp wrote: post #42
andjd wrote: post #7

That Visa isn't fighting this should validate that the government's antitrust enforcement has been lax. For a merger valued in billions of dollars, hiring even the best lawyers for a long fight would have been a rounding error. The only way this happens is for Visa's lawyers to think that the government would likely win.

It is strange that they're not fighting it harder. I wonder if Plaid identified a better exit strategy? Or if Visa is having some buyer's remorse over the $5 billion price tag and saw this as an easy out?

No, they always knew the 500x valuation was BS. It's pretty much like they said, it was a defensive acquisition to prevent the data from going to any of their closest competitors. Visa had no idea what it was going to do with the data, but just wanted to keep it out of everyone else's reach.

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#174

Post by dexterous »

f430 wrote: post #143
wh-uws wrote: post #14

Finally some antitrust enforcement! This was clearly going to be anti competitive and bad for consumers. Plaid has a great product and will either spac / ipo or be a great acquisition target for someone else.

Plaid broke the law and now someone can acquire it at a huge discount. They played themselves.

You get an upvote just for the sheer brashness of that comment! :D

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#175

Post by smnrchrds »

f430 wrote: post #127
smnrchrds wrote: post #82

Earlier quoted context omitted.

They are getting sued by TD Bank for this very reason: > The bank said in the court filings that the interface "dupes" consumers into believing they are entering personal information into TD Bank's trusted platform. > "In reality, however, consumers are unwittingly giving their login credentials to the defendant, who takes the information, stores it on its servers, and uses it to mine consumers' bank records for valu…

Oh man I can't believe they actually pulled this on a Canadian Bank. I tell my founders to always always fly straight or don't fly at all because if you cut corners or deceive, it will come back to you. Had they been honest and played by the rules they could be sitting on a massive windfall. Unfortunately, some VCs and founders think like gangsters and get surprised when things dont plan out. Just because it worked f…

Yeah. TD is so tired of them they have a page warning customers about them, without naming names:

> When using a fintech app, you may be providing your confidential TD username and password directly to third parties over whom TD has no control. Please be aware that the sharing of your TD credentials is contrary to the terms of our agreements, and TD will not be responsible for any harm that results from the sharing of your credentials.

https://www.td.com/us/en/personal-banking/security-center/fi...

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#176

Post by dexterous »

jerry80 wrote: post #65
rizpanjwani wrote: post #29

Earlier quoted context omitted.

Never used Plaid but didn't they require your banking credentials and also didn't have a very secure mechanism for storing them?

Yes. Plaid can be used to verify banking details (many stock brokers use it for this, for example). Plaid works by asking the user to give their banking username and password to Plaid, and then their two factor authentication token too. Plaid logs into their account behind the scenes to verify ownership. Plaid claims to not store this info, and I assume that they don't, but it still seems like one of the biggest secu…

> Plaid claims to not store this info, and I assume that they don't

Think of it as Plaid storing OAuth2 access tokens, sort of; and the tokens do expire (over pretty long periods), though, some bank integrations do allow them to generate their equivalent of refresh tokens.

Plaid didn't go into this blind; they know the tightrope they're walking. As someone who's worked with Plaid to build an integration into our product, I'd say they're definitely in a very gray area, but that's pretty much all of the Fintech space right now.

Although, I'd also say they're not malicious; even if it is just motivated by the fear of the bad press resulting in a customer exodus.

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#177

Post by dexterous »

purple_ferret wrote: post #83

Yet Intuit was able to shut down Credit Karma's potential as a competitor with ease. Something fishy in the district of Washington.

Well, Intuit showed a little restraint and didn't offer to pay an obscene price for Credit Karma. :)

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#178

Post by waprin »

kripy wrote: post #169
throwaway9980 wrote: post #112

Earlier quoted context omitted.

I am sure I will be called naive, but this is shocking to me. I assumed that Plaid was integrating with the banks and not doing this sort of thing because of the people associated with Plaid. Their seed round included Spark Capital and Google Ventures. Their most recent round included Mary Meeker and Andreessen Horowitz. [1] These investors have reputations to protect. This type of thing would certainly come out in d…

They're not hiding the fact. From their website [1]: "When you choose to connect your financial accounts to an app using Plaid, you will be prompted to enter the username and password associated with those accounts. Plaid then links your accounts to the app you want to use so you can share your data." [1] https://plaid.com/how-it-works-for-consumers/

Disagree, they are hiding the fact by assuming ignorance of most users. A true “link” , would use something like OAuth to have the bank handle authentication and provide explicitly scoped subset of consumer data to Plaid. Instead they are taking the plaintext password and getting total access. Just taking that passwords itself is a security vulnerability. Google doesn’t even know your Gmail password, just the hash, but since Plaid can’t use a password hash to login, it must store your plaintext password to your financial accounts, some of THE most sensitive data. Furthemore they have access to way more data than they should rather than clearly defined scoped subsets of it.

The whole company is a privacy and security disaster. Of course it’s annoying that banks don’t provide reasonable OAuth APIs, but Plaid “disrupts” that by deceiving consumers into dangerous security vulnerabilities with their most sensitive personal data.

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#179

Post by etaioinshrdlu »

throwaway9980 wrote: post #112
smnrchrds wrote: post #82

Earlier quoted context omitted.

They are getting sued by TD Bank for this very reason: > The bank said in the court filings that the interface "dupes" consumers into believing they are entering personal information into TD Bank's trusted platform. > "In reality, however, consumers are unwittingly giving their login credentials to the defendant, who takes the information, stores it on its servers, and uses it to mine consumers' bank records for valu…

I am sure I will be called naive, but this is shocking to me. I assumed that Plaid was integrating with the banks and not doing this sort of thing because of the people associated with Plaid. Their seed round included Spark Capital and Google Ventures. Their most recent round included Mary Meeker and Andreessen Horowitz. [1] These investors have reputations to protect. This type of thing would certainly come out in d…

VC's actually tend to love companies that are a little bit sneaky. Just not too sneaky to have to face consequences.

Re: Visa and Plaid Abandon Merger After Antitrust Division’s Suit to Block

#180

Post by cosmie »

smnrchrds wrote: post #82
seanieb wrote: post #75

I’ve some friends that works there, so I’m hesitant to say this, because I’m sorry for them, but Plaid is a terrible company. Their main product scrapes financial data from unsuspecting users that simply think they’re making a bank transfer and not signing away the privacy and security of their banking, 401k and trading information. https://twitter.com/seanieb/status/1298871471645761537?s=20

They are getting sued by TD Bank for this very reason: > The bank said in the court filings that the interface "dupes" consumers into believing they are entering personal information into TD Bank's trusted platform. > "In reality, however, consumers are unwittingly giving their login credentials to the defendant, who takes the information, stores it on its servers, and uses it to mine consumers' bank records for valu…

> Also, giving your credentials to any third party, including Plaid, voids the warranty at many financial institutions.

Funny enough, I've seen that be the case at some banks that simultaneously integrate Plaid into their online account application flow for the initial/funding deposit but. Pretty ironic that users are implicitly coerced into voiding their liability protection at their existing bank during the course of opening an account at a new one. Who wouldn't hesitate to turn around and also invalidate your liability protections themselves if you used your new bank's credentials with Plaid elsewhere.

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