December 2021 Summaries

In 2021, fintech's impact was particularly prominent in Europe as the continent became the largest global economy for cryptocurrency. Digital wallets also became the most popular payment method for online transactions and are poised to overtake cards at physical points-of-sale next year. The future of payments lies in apps and browsers, with APIs & deep linking to connect them. Open banking has a unique opportunity to evolve from helping people understand and access their financial data to enabling them to put it to use via payments with just a click and biometrics. In 2022, we will see more companies pair open banking’s original offering with its new evolution to offer holistic solutions with one integration. Embedded finance in the mainstream is also expected as enterprise and major tech companies introduce new products and experiences. Global ecommerce explosion will continue, creating a bigger need for better foreign exchange solutions.

Plaid has improved identity coverage for longtail financial institutions and increased user-permissions data access for student loans, with over 90% of Auth:Identity coverage now available to more than 500 longtail institutions. The company has also updated its Account Select pane on Plaid Link, providing users with greater transparency and control over the accounts they share. Additionally, Plaid has released new mobile SDK versions, including Android 3.6.2, iOS 2.3.1, and React Native 7.2, with all customers required to be on version 3.5 or higher starting November 1, 2022. The company is also planning for its Assets product in 2022 and seeking feedback from developers to inform feature development. Plaid has partnered with various companies, including Carvana, Varo, and Metal, to help them integrate with the platform and achieve their goals, such as accelerating payments and preventing fraud.

Plaid has launched Payouts in the UK, enabling users to instantly make withdrawals and refunds, building on its Payment Initiation service that allows customers like Kraken and PensionBee to offer a smooth "click, confirm, and carry on" experience. The new product uses Railsr1's e-money accounts to facilitate instant payouts, offering low-cost payments with verified bank details, easy integration, and real-time payment confirmation. This move aims to drive open banking payment adoption across various use cases, including e-commerce and iGaming, allowing users to seamlessly pay-in and pay-out using the same integration.

Elena Branchini is a technical recruiter at Plaid, responsible for hiring back-end engineers and program managers. She plays a crucial role in helping candidates find their home within the company by understanding their needs and ensuring they align with Plaid's mission of unlocking financial freedom for everyone. Elena loves working at Plaid due to its supportive team environment and intentional cultural initiatives, which allow employees to be their authentic selves. She believes that finding people who are committed to furthering Plaid's mission is key in her role as a recruiter.

Plaid has achieved ISO27001 and ISO27701 certification, demonstrating its commitment to consumer data security and privacy. This achievement strengthens Plaid's principles of giving users control over their financial information while ensuring the secure handling of their data. The certifications are internationally recognized standards that outline best practices for managing information security risks and extending them to international privacy frameworks and laws. To earn these certifications, Plaid underwent rigorous evaluation by a third-party auditor, which certified that the company has demonstrated a commitment to its practices and policies, has adequate management controls in place, and will continuously improve its privacy and security posture as the industry evolves. This certification is significant as it streamlines compliance processes for companies evaluating Plaid's policies and practices, providing faster decisioning based on third-party analysis of crucial data security and privacy obligations.

Plaid Accelerate is expanding its incubator program for early-stage founders who are Black, Indigenous, or People of Color (BIPOC) to include two new cohorts in 2022. The program aims to provide tactical assistance and create a supportive community for BIPOC entrepreneurs, with the goal of helping them navigate key milestones such as fundraising, app releases, and defining revenue models. The expanded program will condense its length to five months and run two cohort programs back-to-back, each tailored to the needs of a specific group of founders. The first cohort will support very early-stage fintech companies preparing for Seed funding, while the second cohort will focus on startups with products released in GA or with meaningful traction, preparing for Series A funding. The program's expansion aims to make financial services more accessible and support even more BIPOC fintech founders as they grow and scale their apps and services.

Variable Recurring Payments are the latest innovation in open banking, aiming to mitigate risk and provide consumers with more control over their recurring payments by offering a safer and faster alternative to traditional card-on-file transactions. With Variable Recurring Payments (VRP), consumers can choose the parameters of their payments, ensuring they don't receive unexpected large payments, reducing the risk of fraud. This new functionality allows merchants to offer consumers more choices at checkout, ultimately benefiting both parties in open banking. The introduction of VRP is expected to fuel open banking adoption and provide a magical experience for consumers and merchants alike by turning mundane recurring payments into empowering ones.

Plaid aims to unlock financial freedom for everyone by improving access to financial services and tools, particularly for those who are unbanked or credit invisible. The company has built a strong foundation that enables connectivity to over 12,000 financial institutions worldwide, but recognizes the need to continue innovating to meet growing demand and improve data quality while prioritizing consumer security and control. With the fintech revolution in full swing, Plaid is scaling its engineering function to deliver high-quality data connectivity solutions, traffic optimization, and differentiated insights, with a focus on expanding financial access to more people and fostering an inclusive credit system.

Open Banking payments offer a secure and efficient method of accepting online transactions, reducing transaction costs and the risk of fraud, while providing digital-first consumers with a streamlined checkout process. The global value of Open Banking payments is expected to exceed $116bn by 2026, with over 75% of users being European. Merchants can benefit from reduced transaction costs and virtually eliminated fraud risk, especially those dealing with thin margins or high propensity of chargebacks/refunds. Open Banking payments also enable instant settlement, reducing liquidity cycles for merchants and consumers alike, and offering faster refunds for e-commerce businesses with high merchandise return rates. Adoption rates are surpassing 20%, with Plaid powering Open Banking payments by working directly with merchants and in partnership with PSPs to provide additional functionality and support.