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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

#91

Post by bdcravens »

ryanackley wrote: post #75
akarma wrote: post #19

Earlier quoted context omitted.

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…

This was the merchant, and not Plaid. While Plaid gives such merchants a lot of power, I don't think the ethics issue lies with Plaid (though you could make a good argument that they should grant limited access, and full API access only on a more restricted whitelist basis)

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

#92

Post by seattleeng »

jaymzcampbell wrote: post #71
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…

It's cool that governments are taking action now, but this is a chicken vs egg scenario. If services like Yodlee didn't exist to prove that there was significant demand for programmatic access to consumer financial data by building businesses around it, would governments care? And, how many more years will it take before it gets there? With Plaid/Yodlee/Whatever you can build a Fintech app _today_ in the US that supports thousands of banks. If you're an entrepreneur that's a game changer.

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

#93

Post by bdcravens »

jka wrote: post #28
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/

Hi William, This may be true - but you do still normalize users to the practice of entering their banking login credentials into a web form which is sent to a third party (i.e. yourselves). In addition I believe the developer gains access to the users' bank transaction history - not just for the duration of their login session, but long-term, which is likely something that users aren't fully aware of in most cases. A…

Haven't we on this same website celebrated various Gmail clients and services? Same kinds of risk there (email being different than transactions, but in many cases, that may be worse)

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

#94

Post by bdcravens »

lbotos wrote: post #8
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…

They at least collect it, as they offer that as a service: https://plaid.com/products/transactions I flirted with the idea of using a trial account to feed that data to a Prometheus server to build graphs in Grafana. A slightly more powerful mint/personal capital would be a super valuable tool.

Yes - the key issue being is that the product offering is an API used by second-party with assumed permission from first-party; they are not selling that data to a third-party.

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

#95

Post by docker_up »

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

Interesting, how is this different from Standard Treasury?

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

#96

Post by karshan »

CGamesPlay wrote: post #62
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…

Not a Plaid user, but I believe Mint works the same way. It seems to only decrypt my bank credentials with a key derived from my session password, so I suspect Plaid, if what you say is correct, do something similar. Basically, my password is hashed to see if I can log on. Then it's passed through a PBKDF to get the decryption key for my actual accounts, then that information gets sent to the scrapers to do the actua…

Mint will update transactions in the background (not only when you log in).

In order to do so, they most likely keep your banking password around in memory.

Note: Mint uses OAuth for access to Chase bank accounts, which is great. Last I checked Plaid does not.

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

#97

Post by ativzzz »

cryptica wrote: post #81

I remember I spoke with both the CEO and CTO over Skype several years ago. They actively reached out to me because of an open source project I created and they wanted to recruit me. They made quite an impression on me but I wasn't prepared to move to the US back then. Damn. Missed opportunity. Obviously they were very proactive in reaching out to the developers that they wanted rather than just passively waiting for…

What project were you working on?

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

#98

Post by astura »

curiousDog wrote: post #44
astura wrote: post #26

Earlier quoted context omitted.

You would know if you're being asked for your banks username and password by a third party and can decide if you want to share that information; it's not something that you really need to know anything about ahead of time to be able to avoid. The apps I know who use Plaid are Drop and Venmo. Some banks use it to instantly link external accounts without having to do trial deposits.

There’s a bunch on their website. Amex, betterment seem to use them as well

I'm guessing those two companies probably use Plaid to instantly link external accounts without having to do trial deposits. Trial deposits can take several days. That's the use case that I used it for at Citibank anyways.

I never claimed my list was inclusive, only those are the ones I know use Plaid off the top of my head.

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

#99

Post by astura »

siamakfr wrote: post #43
astura wrote: post #26

Earlier quoted context omitted.

You would know if you're being asked for your banks username and password by a third party and can decide if you want to share that information; it's not something that you really need to know anything about ahead of time to be able to avoid. The apps I know who use Plaid are Drop and Venmo. Some banks use it to instantly link external accounts without having to do trial deposits.

That's not entirely true. They try and imitate your bank's branding on the log in page and do not make any mention of Plaid. For example, when setting up Venmo, I thought I was logging into something my bank had created.

I mean, the only reason I even know what Plaid is is because the services I've used advertise they are using Plaid, for example, Drop: https://imgur.com/a/l4PM6QG I remember seeing it on Citibank too.

You're still sharing your bank account information with someone else. Even if it's your bank's API or whatever, "something my bank created" could be "something my bank had hired an external company to create," or even "a front end my bank created that uses third party software to do all the data processing on the back end." I'm not sure of a meaningful distinction between each case. If you want to minimize sharing bank account information "for privacy" then you don't give your bank account information to anyone.

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

#100

Post by kerryfalk »

bdcravens wrote: post #86
Quanttek wrote: post #79

Earlier quoted context omitted.

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.

It fits 100% in what he's saying. The API grants the developer of the application access to the account history of whoever's logged in. This in no way establishes they are selling anything to any third-parties.

The developer pays for that access. The developer is a third party. They're buying transaction data.

It's explicitly stated within their sales page and directly contradictory to the statement he made above.

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