FinTech startup Plaid is planning to unveil a new payments program on Thursday (Oct. 21) that will facilitate digital payments funded by users’ bank accounts, The Wall Street Journal reported.
An authentication gateway and data provider for users, Plaid’s software tokenizes the ACH process. Plaid makes it easier for individuals to grant permission for banks and FinTechs to access financial information.
See also: Plaid, Square Partner on Easier ACH Payments for SMBs
With Plaid’s new payments program, the money will be transferred by third-party payment processors, including Square, Stripe and SoFi. A pay-by-bank option will appear at checkout, along with other payment choices.
In January, Plaid was to be acquired by Visa for $5.3 billion, but the deal fell apart after the Department of Justice (DOJ) filed an antitrust lawsuit. The DOJ alleged that Visa was buying Plaid to pull the plug on the FinTech’s plans to introduce a payments service. Although both companies denied the allegation, neither wanted to get snarled in a long legal battle.
See also: Visa Opts out of Plaid Acquisition, Cites Complex Litigation
Head of Revenue at Plaid Paul Williamson told the WSJ that the new payments service complements card networks because it offers a direct transfer from users’ bank accounts. He added that the company’s clients wanted a solution that offered a “more diversified payment capability” than what Plaid was able to offer.
In a September PYMNTS interview with Plaid Chief Technology Officer Jean-Denis Greze, he said that data sharing is especially important today, as people’s financial information is stored in numerous places. Banks have a lot of transaction data, but it’s hard for any single company to get a full picture.
Read more: Plaid CTO: Banks, FinTechs Must Turn ‘Transaction Data Mosaic’ Into Cohesive Service Offering
Founded in 2016 in Silicon Valley by Zachary Perret, who serves as CEO, and William Hockey, Plaid works with over 5,000 FinTech partners and operates six offices worldwide with a workforce of 800.
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NEW PYMNTS DATA: DIGITAL BANKING STUDY – THE BREWING BATTLE FOR WHERE WE WILL BANK
About: Forty-seven percent of U.S. consumers are shying away from digital-only banks due to data security worries, despite significant interest in these services. In Digital Banking: The Brewing Battle For Where We Will Bank, PYMNTS surveyed over 2,200 consumers to reveal how digital-only banks can shore up privacy and security while offering convenient services to satisfy this unmet demand.
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