6 ms·

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, the

by 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.
    - lambda_obrien 6y ago
      When i used Mint at first, they'd just ask you to go to the page with the caphcha or whatever and go through it when you'd update your accounts with the auth scraper method. This was like maybe a decade ago? You could do a similar thing with mfa in realtime.
    - dayjah 6y ago
      My experience using plaid with Schwab, on which I have MFA, is that you need to add an MFA code to your password when connecting the two. It works for some duration (a few days?) and then loses sync and you have to re-enter the password+MFA combo.
      - bobbylarrybobby 6y ago
haltingproblem 6y ago
Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute.
- deleted 6y ago
  [deleted]
- vageli 6y ago
  > Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. > We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute. Why is zelle a poor substitute? I can pay people via phone number.
  - kevin_thibedeau 6y ago
    Zelle still uses ACH under the covers.
    - throwaheyy 6y ago
      Zelle is real-time, while ACH is not.
      - toomuchtodo 6y ago
        Zelle is owned by a private company, owned by the US' largest banks [1]. The US Federal Reserve is working on a replacement [2] (FedNow) that presumably will have less power to keep banking entities (small banks, community banks) in the US with less pull off the network (with pricing or other mechanisms). From the perspective that instant payments should be an inexpensive, accessible utility for the benefit of all citizens, the Fed's FedNow efforts are preferable to Zelle or legacy ACH services. [1] https://en.wikipedia.org/wiki/Zelle_(payment_service) https://en.wikipedia.org/wiki/Zelle_(payment_service) [2] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
salawat 6y ago
Technically, Plaid doesn't have access in a sanctioned way. You pretty much guaranteed violate any electronic banking ToS by sharing credentials with a third party.
- judge2020 6y ago
  Only if Plaid weren't a company that has contracts in place with every single bank they offer to access their services without being sued (despite the fact that the antique tech stacks these banks have don't allow Plaid to use oauth in most cases).
aliyfarah 6y ago
>Plaid's killer feature has always been their private access to APIs that the banks won't give to anyone else. These private apis will soon no longer be private due to Open Banking/PSD2 (europe) regulations. Plaid's biggest competitive advantage was removing the complexity of various data formats and APIs of banks. This variance will soon be gone in the coming years.
slavoingilizov 6y ago
So why not force the opening of the walled garden in law then? The EU has PSD2 now which forces all banks to have open APIs. We have multiple Plaid-like competitors providing the platform on top of those APIs. But it wouldn't have happened without regulation. Generally innovating through regulation is bad and I don't support it. But I think the aversion to it in the US is what creates these monopolies in the first place and in this specific use case, I think it's a faster way to solve the problem. This is an example of what becomes possible (no card details and low fees): https://techcrunch.com/2019/01/29/truelayers-payments-api-lets-companies-accept-payments-through-open-banking/ https://techcrunch.com/2019/01/29/truelayers-payments-api-le...
- cactus2093 6y ago
  yep I think this is exactly what is needed

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.
  - lambda_obrien 6y ago
    When i used Mint at first, they'd just ask you to go to the page with the caphcha or whatever and go through it when you'd update your accounts with the auth scraper method. This was like maybe a decade ago? You could do a similar thing with mfa in realtime.
  - dayjah 6y ago
    My experience using plaid with Schwab, on which I have MFA, is that you need to add an MFA code to your password when connecting the two. It works for some duration (a few days?) and then loses sync and you have to re-enter the password+MFA combo.
    - bobbylarrybobby 6y ago

haltingproblem 6y ago

Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute.

deleted 6y ago
[deleted]
vageli 6y ago
> Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. > We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute. Why is zelle a poor substitute? I can pay people via phone number.
- kevin_thibedeau 6y ago
  Zelle still uses ACH under the covers.
  - throwaheyy 6y ago
    Zelle is real-time, while ACH is not.
    - toomuchtodo 6y ago
      Zelle is owned by a private company, owned by the US' largest banks [1]. The US Federal Reserve is working on a replacement [2] (FedNow) that presumably will have less power to keep banking entities (small banks, community banks) in the US with less pull off the network (with pricing or other mechanisms). From the perspective that instant payments should be an inexpensive, accessible utility for the benefit of all citizens, the Fed's FedNow efforts are preferable to Zelle or legacy ACH services. [1] https://en.wikipedia.org/wiki/Zelle_(payment_service) https://en.wikipedia.org/wiki/Zelle_(payment_service) [2] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...

salawat 6y ago

Technically, Plaid doesn't have access in a sanctioned way. You pretty much guaranteed violate any electronic banking ToS by sharing credentials with a third party.

judge2020 6y ago
Only if Plaid weren't a company that has contracts in place with every single bank they offer to access their services without being sued (despite the fact that the antique tech stacks these banks have don't allow Plaid to use oauth in most cases).

aliyfarah 6y ago

>Plaid's killer feature has always been their private access to APIs that the banks won't give to anyone else. These private apis will soon no longer be private due to Open Banking/PSD2 (europe) regulations. Plaid's biggest competitive advantage was removing the complexity of various data formats and APIs of banks. This variance will soon be gone in the coming years.

slavoingilizov 6y ago

So why not force the opening of the walled garden in law then? The EU has PSD2 now which forces all banks to have open APIs. We have multiple Plaid-like competitors providing the platform on top of those APIs. But it wouldn't have happened without regulation. Generally innovating through regulation is bad and I don't support it. But I think the aversion to it in the US is what creates these monopolies in the first place and in this specific use case, I think it's a faster way to solve the problem. This is an example of what becomes possible (no card details and low fees): https://techcrunch.com/2019/01/29/truelayers-payments-api-lets-companies-accept-payments-through-open-banking/ https://techcrunch.com/2019/01/29/truelayers-payments-api-le...

cactus2093 6y ago
yep I think this is exactly what is needed