Introduction to Plaid: What is it and What Does it Do?

By  //  January 26, 2023

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What is Plaid?

Plaid is a payment gateway that provides secure data access to financial services companies.

By securely enabling the exchange of sensitive information between your app and the bank’s servers, we empower developers to innovate in new ways and make mobile apps more secure.

In other words: Plaid is a company that helps banks and other financial services companies securely access consumer data. They do this by providing a third-party service that provides a layer of security between your app and the bank’s servers.

How does Plaid work?

Plaid is an API that allows developers to access user financial data from participating banks, credit unions, and other financial institutions. As a participant in Plaid’s Partner Network, your company will be able to integrate Plaid’s technology into your apps by using the SDK we provide.

Once integrated with Plaid’s APIs, you’ll be able to make use of the following features:

  • Requesting user information from one or more financial institutions
  • Verifying identity through [Social Security Number] (SSN) and date of birth validation
  • Reporting account balance and transaction history Creating a new bank account

What is the Plaid API (application programming interface)?

The Plaid API is a set of tools that allows developers to integrate with Plaid and create apps that can read and write useful information.

For instance, if you’re building a bank app, you might want your users to be able to connect their bank accounts so they can make payments directly from their app without leaving your site. Or maybe you’re building an app for managing money for college students—in this case, instead of storing sensitive data like credit card numbers on your servers or in the cloud, you could use Plaid’s OAuth 2.0-compliant authorization endpoint (which integrates seamlessly with banking apps) so that students can securely access their finances from any device without having to worry about security problems. Developers have already built over 8 million apps using Plaid’s technology!

Is Plaid secure?

You’ve probably heard that Plaid is a secure tool, with a strong focus on security and privacy. That’s true, but we can go into more detail here:

  • Plaid does not have access to your bank account information. All Plaid does is forward requests from your application server to the bank servers and then send responses back to you. We don’t store any sensitive data in our data centers; if you send us an API call over HTTPS or TLS 1.2 encryption (which we recommend), no one else will be able to see the details of that transaction either!
  • Plaid uses PCI DSS-compliant hosting for all its servers. This means we’re audited regularly by an independent third party who ensures that our systems are secure enough for banks’ requirements, so they can feel confident sending their users’ info through them as well!

Which banks work with Plaid?

Plaid supports dozens of banks, but the list isn’t nearly as long as you might think. Most banks that work with Plaid are the major players in the U.S., including Bank of America and Wells Fargo.

In addition to these two big names, there are also smaller regional banks like TD Bank and USAA that can use Plaid’s services.

The benefit of using Plaid bank integration is clear: you’ll be able to offer your customers a more seamless shopping experience across all their devices. This is especially important on mobile devices where people often switch between apps while completing their purchases (for example, they might start by selecting items in a website browser before finishing their order through an app).

By connecting your app with Plaid’s APIs, you can automatically pass payment details between all those different apps without any user input required—a much better experience than asking users for data each time they shop from a new device or platform!


In this article, we’ve tried to give you a quick introduction to Plaid. We hope it has helped you see how easy it is to get started with Plaid and why the time might be right for your business.

If you have any questions about what we discussed here or anything else in the world of financial technology, feel free to reach out!