How Does Venmo Use Plaid?

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When you set up an account on a platform like Venmo, you’ll get a request to share your bank login credentials. But what is Plaid doing with that information?

Plaid is a service that allows you to control who gets access to your financial data. The platform authenticates your information for companies like Venmo. It also protects your sensitive information. Plaid has over 100 million users globally and is available in 18 countries.

Basics of Plaid

Think of Plaid as a bridge or intermediary between your bank and financial companies. Its service safeguards your personal information while you use the services of companies like Chime and Venmo.

How Does Plaid Keep Your Information Secure?

Plaid uses a specialized encryption system to protect your data when it send your personal information to apps you’ve authorized.

Instead of giving your account information to every single financial institution you sign up for, you just give it to Plaid. Then, Plaid acts as the middleman to keep financial information secure in several ways:

• Monitoring and Alerts: Plaid monitors and analyzes data to prevent stolen identity, synthetic identity and account takeover fraud.
• Around-the-Clock Protection: Safety monitoring, automated alerts and a 24/7 on-call team help Plaid quickly respond to and resolve any potential issues so you can be confident that your private information is secure.
• Audits: Plaid undergoes internal audits to test the effectiveness of their operations. This also helps them identify and resolve any vulnerabilities.
• Strong Authentication: Plaid protects your data on their systems and requires multi-factor authentication for added security.

How Plaid Works

Plaid has a global reach across the United States, Canada, and Europe. It’s connected to over 12,000 financial institutions, such as:

• MoneyLion
• Chime
• Venmo

With Plaid, you can:

• Safely transfer funds
• Send friends and family money
• Save
• Invest
• Apply for a loan
• Online bank

How to Sign Up for Plaid

The service is free for consumers. Plaid makes money by charging a fee to the financial institution that is using your data.

You can sign up in three easy steps per the website: 

1. When you sign up with an app that uses Plaid, you can select your financial institution from a list. Then, enter your login and password.
2. In seconds, Plaid encrypts the data you’ve chosen to share (for instance, your account balance). Then, it securely shares it with the app you want to use. Plaid never shares your login and password with the app.
3. Plaid builds a secure, ongoing connection between the app and your bank.
4. Plaid communicates with your bank to keep your personal information, such as your username and password, private.

According to Plaid, some of the most common information users allow access to include:

• Account and routing number
• Account balance
• Transaction history
• Personal loans and credit cards
• Investment holdings
• Identity information (to prevent fraud)

It’s important to note that Plaid does not have a stand-alone app, but you can sign up for the Plaid portal through my.plaid.com, where you can track the data you’ve shared with the app. You can delete and update your information as needed through the portal. 

Where Is Plaid Used

You don’t have to do much to use Plaid. A popup window will appear informing you that you’re allowing Plaid to share certain information with an app. Whether you want to transfer money via Venmo or use online banking with top-tier companies such as MoneyLion, Chime, Wells Fargo, Bank of America, American Express, or more, using Plaid is simple and requires little effort. 

Bottom Line

Plaid is a secure platform that connects your bank account with financial institutions and prevents them from accessing your personal information. You may be apprehensive about trusting a third-party service, but Plaid doesn’t sell user information and takes security seriously. 

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