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Fintech startup Plaid raises $250M at a $2.65B valuation

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Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#71

Post by jaymzcampbell »

chatmasta wrote: post #29

Plaid is a great idea, but the implementation worries me. My understanding is that, for most banks, you give Plaid your username and password, and Plaid scrapers on their servers log into your online banking account. Even worse, Plaid obfuscates this behavior from users by replicating their banks login window and making it appear that you are logging directly into your bank. I'm not sure how to feel about this, becau…

It always blew my mind that services like Yodlee (https://www.yodlee.com) worked that way. I can understand it from the point of view that no traditional bank was set up to allow structured access but it never felt right to me.

In the UK there is a big push around "open banking"[1] which will bring this into the 21st century and allow for proper programmatic access to data. It's still in it's infancy but the sector here is transforming around it.

[1]: (https://www.openbanking.org.uk/customers/what-is-open-bankin...)

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#72

Post by darkerside »

rco8786 wrote: post #57
darkerside wrote: post #41

Earlier quoted context omitted.

Do users have any idea exactly what they're giving up here though? Do they have fine-grained permissions to allow read-only vs write access, and to choose between transaction and account level data? And is there anything that prevents those second-party developers from then turning around and selling data to third parties (besides their own TOS with Plaid)?

What write access would there be? Obviously this is a hugely sensitive service, I’m not denying that. But there’s a way to do it right and it seems that Plaid is attempting to do that. So I’m not ready to declare them evil before they actually do anything evil.

> it _seems_ that Plaid is attempting to do that

Isn't this a clear parallel to the Google "Don't be evil" approach that gets discarded as soon as the opportunity cost becomes too large to ignore?

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#73

Post by root_axis »

whockey wrote: post #14
akarma wrote: post #4

There's been a whistleblower or two on HN about how Plaid scapes and sells your bank account transaction history to third parties. It seems more unethical than most selling-user-data strategies in that the users don't even know Plaid is involved in the transaction whatsoever ; they're just a hidden middle layer. I'd be interested to know if this is still part of their monetization strategy, or if anyone at Plaid can…

Co-founder of Plaid here. This is not true, we do not sell transactional data to third parties. We make 100% of our money by letting developers build financial applications[1]. [1] - https://plaid.com/pricing/

The product is obviously amazing, and I know for a fact that it's creating credit opportunities for consumers with credit history that may not accurately reflect their current financial status, but there is an insidious aspect to the product: the 6 months of future access to transactions and banking information. Most consumers don't realize they're giving this up when they use your product and I believe they would be much less likely to use it if they were aware.

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#74

Post by kbyatnal »

colinloretz wrote: post #51
dpflan wrote: post #24

Earlier quoted context omitted.

Wasn’t YC company Standard Treasury trying to help banks become more API accessible? If the banks have an API an offering, I can see how a standard would need to exist to support the primary use cases (auth, balance, transaction), and perhaps Plaid is showing what they could look like (reducing the complexity of interfacing disparate banks’ approaches to managing bank data). [NB: if there is a standard or info I am c…

That was the goal but they were acquihired by Silicon Valley Bank. https://www.svb.com/news/company-news/api-banking-startup-st...

And then they left SVB to try again

https://treasuryprime.com

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#75

Post by ryanackley »

akarma wrote: post #19
whockey wrote: post #14

Earlier quoted context omitted.

Co-founder of Plaid here. This is not true, we do not sell transactional data to third parties. We make 100% of our money by letting developers build financial applications[1]. [1] - https://plaid.com/pricing/

Thanks William, and sorry for the wrong accusation. Super embarrassed; I read so many comments on that thread I must've conflated two.

Here is one discussion from a so-called whistleblower I was involved in. I will let you decide on the ethics[1].

I'm in the ACH space and I personally know a merchant who planned on using them for account verification for point of sale ACH payments. This merchant also planned on grabbing transaction history while they were in there for I don't know what. Analytics maybe? I have no idea if they ever went through with their plan.

[1]https://news.ycombinator.com/item?id=17692291

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#76

Post by huac »

harryf wrote: post #63

Side note: I once heard from the venture arm of a rather well known CRM that Patagonia gets upset when you embroider your logo on their jackets ( e.g. in this picture https://techcrunch.com/wp-content/uploads/2018/12/DSC1296-2.... )...

that's not true, patagonia offers embroidery themselves: https://www.patagonia.com/corporate-sales-silk-screening-emb...

they DO refuse to do corporate orders for certain companies, e.g. oil companies / oil bankers, given that those are antithetical to their mission.

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#77

Post by dpflan »

kbyatnal wrote: post #74
colinloretz wrote: post #51

Earlier quoted context omitted.

That was the goal but they were acquihired by Silicon Valley Bank. https://www.svb.com/news/company-news/api-banking-startup-st...

And then they left SVB to try again https://treasuryprime.com

Wow. Thanks for the update. From TP"s site:

""" We're the team behind Standard Treasury and the Silicon Valley Bank API Banking Platform which forms the backend for Stripe Atlas - we're the experts in this space. """

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#78

Post by Quanttek »

For those interested: In Europe, banks are forced to provide fintech companies access to customer data when the user consents to this under its "open banking" initiative

https://www.cnbc.com/2017/12/25/psd2-europes-banks-brace-for...

Personally speaking, i have a problem with companies like Plaid and SOFORT (EU), where they kind-of hide the fact that you provide them with your login credentials (and not the bank). From what I understand from this thread, Plaid may be selling your data and gives developers full access to the customer's transaction history. This is worrying

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#79

Post by Quanttek »

whockey wrote: post #14
akarma wrote: post #4

There's been a whistleblower or two on HN about how Plaid scapes and sells your bank account transaction history to third parties. It seems more unethical than most selling-user-data strategies in that the users don't even know Plaid is involved in the transaction whatsoever ; they're just a hidden middle layer. I'd be interested to know if this is still part of their monetization strategy, or if anyone at Plaid can…

Co-founder of Plaid here. This is not true, we do not sell transactional data to third parties. We make 100% of our money by letting developers build financial applications[1]. [1] - https://plaid.com/pricing/

Hi William,

how does your statement fit with the fact that one of your products is literally selling transactional data? https://plaid.com/products/transactions

While I'll assume this is only of the customers of a particular product, it is still worrying as many customers may not understand that fact as you are not transparent about your role and the access granted.

Re: Fintech startup Plaid raises $250M at a $2.65B valuation

#80

Post by vichu »

Quanttek wrote: post #78

For those interested: In Europe, banks are forced to provide fintech companies access to customer data when the user consents to this under its "open banking" initiative https://www.cnbc.com/2017/12/25/psd2-europes-banks-brace-for... Personally speaking, i have a problem with companies like Plaid and SOFORT (EU), where they kind-of hide the fact that you provide them with your login credentials (and not the bank). Fr…

Per whockey's comment here[0], it doesn't seem like Plaid is selling your data directly to 3rd parties - though it doesn't prevent the developers you're giving your data to from selling it.

[0] https://news.ycombinator.com/item?id=18655507

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