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"Plaid has become the leading financial data aggregation company in the United States. Plaid is planning to leverage its connections to build a bank-linked pay

"Plaid has become the leading financial data aggregation company in the United States. Plaid is planning to leverage its connections to build a bank-linked payments network that would compete with Visa. Plaid’s money movement platform would allow consumers to pay merchants directly from their bank accounts using bank credentials rather than a debit card. Plaid’s established connections and technology uniquely positions it to enter the payments market and disrupt Visa’s monopoly" Fascinating. I think the line that DOJ is drawing is tenuous. It is not like removing Plaid from the marketplace would remove dangers to Visa's debit card monopoly. Wouldn't a Google/Apple/FB/Amazon be more of a platform threat. Google/Paypal already do this when you can directly pay from bank account to merchant. How does this help?

ddoolin 6y ago
The underlying argument is that they would probably just do it again with another competitor down the line, I believe. At its heart is anti-competitive behavior.
cactus2093 6y ago
It is quite a fascinating scenario. Apple and Google wallet are integrated into the credit card processing infrastructure. So they don't compete with Visa, their payments still go over Visa's rails. Plaid's killer feature has always been their private access to APIs that the banks won't give to anyone else. It's essentially like they're using modern web APIs while everyone else is using snail mail (i.e. ACH, bank transfers that settle in batches once per day). I'm not exactly sure how they struck those deals and why there is no reasonable, open integration path or payments protocols between banks in the US like there is in every other developed country. Is it just that the banks like making their $15 per wire transfer? It feels like there's got to be more to it but I'm not sure. But regardless, where we've ended up is the banks have fought so well to keep everybody out of their collective walled garden, but somehow Plaid has snuck in under the radar and has become so large and entrenched that they are themselves being called the monopolist, rather than the banks that own and control the system but of which there are multiple. I don't know enough about the details of Plaid's business though to weigh in on whether there's any truth to these claims.
- JadoJodo 6y ago
  I was under the impression that they didn’t have access to any APIs but that they simply took your credentials and scraped the bank webpage.
  - someoldguy 6y ago
    I was under the impression it was a little of both, depending on the bank.
  - ceejayoz 6y ago
    They do some of both. When I link a Capital One account, I get an OAuth-style flow and the ability to select which accounts I share directly on the C1 website. The sites I use this on show up as "Linked Apps" in my security settings in C1. Others use the credentials-based flow.
    - semerda 6y ago
      Where they aren’t using APIs and instead the scrapers, does that mean they have your banking login credentials? Be curious to hear how they get around MFA.
      - propogandist 6y ago
        Yes, they also can monitor and scan your financial transactions. Accepting their T&C and Privacy Policy gives them too much power, consumers are freely giving away access to their financial information for convenience.
        WrtCdEvrydy 6y ago
        > Accepting their T&C and Privacy Policy gives them too much power, consumers are freely giving away access to their <VERB> information for <THING>
        oh_sigh 6y ago
        So what? Convenience is nice. And I'm willing to pay for convenience when the other options are far less convenient.
capableweb 6y ago
> The complaint alleges that Visa’s CEO viewed the acquisition as an “insurance policy” to protect against a “threat to our important US debit business.” This quote makes it sound like Visa is acting monopolistic, which is the behavior they don't want to see. Rest of the paragraph > This acquisition is the second-largest in Visa’s history, with an extraordinary price tag of $5.3 billion. Visa’s CEO justified the deal to Visa’s Board of Directors as a “strategic, not financial” move, and noted that in part because “our US debit business i[s] critical and we must always do what it takes to protect this business.” Unless acquired, Visa feared that Plaid “on their own or owned by a competitor [was] going to create some threat” with a “potential downside risk of $300-500M in our US debit business” by 2024. If Plaid remained free to develop its competing payment platform, then “Visa may be forced to accept lower margins or not have a competitive offering.”
- brendoelfrendo 6y ago
  Yeah, the Justice Department may not have scrutinized this acquisition all that much, but this guy said the quiet part out loud.
  - capableweb 6y ago
    It's unclear where these statements come from, but I find it hard to imagine they were meant to be public, the CEO would know better. Most likely they were internal conversations that got leaked or conversations that got logged which were part of some sort of warrant/information request. Or you're right and CEOs of huge multi-international companies are a lot more stupid than we previously thought.
    - brendoelfrendo 6y ago
      I mean, even if he said it internally, that's a dumb thing to say.

ddoolin 6y ago

The underlying argument is that they would probably just do it again with another competitor down the line, I believe. At its heart is anti-competitive behavior.

cactus2093 6y ago

It is quite a fascinating scenario. Apple and Google wallet are integrated into the credit card processing infrastructure. So they don't compete with Visa, their payments still go over Visa's rails. Plaid's killer feature has always been their private access to APIs that the banks won't give to anyone else. It's essentially like they're using modern web APIs while everyone else is using snail mail (i.e. ACH, bank transfers that settle in batches once per day). I'm not exactly sure how they struck those deals and why there is no reasonable, open integration path or payments protocols between banks in the US like there is in every other developed country. Is it just that the banks like making their $15 per wire transfer? It feels like there's got to be more to it but I'm not sure. But regardless, where we've ended up is the banks have fought so well to keep everybody out of their collective walled garden, but somehow Plaid has snuck in under the radar and has become so large and entrenched that they are themselves being called the monopolist, rather than the banks that own and control the system but of which there are multiple. I don't know enough about the details of Plaid's business though to weigh in on whether there's any truth to these claims.

JadoJodo 6y ago
I was under the impression that they didn’t have access to any APIs but that they simply took your credentials and scraped the bank webpage.
- someoldguy 6y ago
  I was under the impression it was a little of both, depending on the bank.
- ceejayoz 6y ago
  They do some of both. When I link a Capital One account, I get an OAuth-style flow and the ability to select which accounts I share directly on the C1 website. The sites I use this on show up as "Linked Apps" in my security settings in C1. Others use the credentials-based flow.
  - semerda 6y ago
    Where they aren’t using APIs and instead the scrapers, does that mean they have your banking login credentials? Be curious to hear how they get around MFA.
    - propogandist 6y ago
      Yes, they also can monitor and scan your financial transactions. Accepting their T&C and Privacy Policy gives them too much power, consumers are freely giving away access to their financial information for convenience.
      - WrtCdEvrydy 6y ago
        > Accepting their T&C and Privacy Policy gives them too much power, consumers are freely giving away access to their <VERB> information for <THING>
      - oh_sigh 6y ago
        So what? Convenience is nice. And I'm willing to pay for convenience when the other options are far less convenient.

capableweb 6y ago

> The complaint alleges that Visa’s CEO viewed the acquisition as an “insurance policy” to protect against a “threat to our important US debit business.” This quote makes it sound like Visa is acting monopolistic, which is the behavior they don't want to see. Rest of the paragraph > This acquisition is the second-largest in Visa’s history, with an extraordinary price tag of $5.3 billion. Visa’s CEO justified the deal to Visa’s Board of Directors as a “strategic, not financial” move, and noted that in part because “our US debit business i[s] critical and we must always do what it takes to protect this business.” Unless acquired, Visa feared that Plaid “on their own or owned by a competitor [was] going to create some threat” with a “potential downside risk of $300-500M in our US debit business” by 2024. If Plaid remained free to develop its competing payment platform, then “Visa may be forced to accept lower margins or not have a competitive offering.”

brendoelfrendo 6y ago
Yeah, the Justice Department may not have scrutinized this acquisition all that much, but this guy said the quiet part out loud.
- capableweb 6y ago
  It's unclear where these statements come from, but I find it hard to imagine they were meant to be public, the CEO would know better. Most likely they were internal conversations that got leaked or conversations that got logged which were part of some sort of warrant/information request. Or you're right and CEOs of huge multi-international companies are a lot more stupid than we previously thought.
  - brendoelfrendo 6y ago
    I mean, even if he said it internally, that's a dumb thing to say.