July 2022 Summaries

Plaid and Gemini are working together to simplify the user onboarding process for cryptocurrency exchange customers, allowing them to easily fund their accounts with just a few clicks. This partnership aims to bridge the gap between traditional finance and crypto ecosystems, enabling users to access digital assets more seamlessly. The collaboration will also help Gemini customers in the US and UK convert fiat into crypto more easily and streamline identity verification processes. Additionally, Plaid is supporting Gemini's growth by helping them develop simple, fast experiences for their customers worldwide. By joining forces with Crypto UK, a self-regulatory trade association representing the crypto asset sector, Plaid and Gemini will work together to develop policies that support the long-term success of the ecosystem.

Plaid Identity Verification has been instrumental in helping Republic build a secure investing platform that allows regular people to invest in highly vetted startups. By using Plaid's single solution, Republic was able to verify the identity of its 2.5 million users across over 100 countries in under 30 seconds. This helped reduce fraud rings and increased the platform's success rates from 60% to 90%. The partnership has also enabled Republic to focus on investing in user experience, building more sophisticated innovations, and bringing better features to the market earlier. With Plaid Identity Verification, Republic can trust that its vendor is doing amazing work and will continue to innovate and update the solution over time. As for advice, Alan Lee suggests partnering with your vendor and embracing the journey, highlighting the importance of understanding their roadmap and building synergies to create a better world.

Plaid is launching Variable Recurring Payments (VRP) in beta in the UK, a payment instruction that allows automation of recurring future payments with one authentication, enabling consumers and merchants to control those payments. The launch aims to simplify online payments for individuals and businesses, particularly for companies like Expensify, which can automatically pull varying repayments from customers' business accounts to settle card balances. The Competition and Markets Authority (CMA) has mandated VRP for sweeping use cases, such as moving funds between bank accounts held in one person's name, while Plaid believes extending VRP to other use cases could save UK businesses over £1.5 billion annually in payment processing fees by capping fees at 10 basis points. The low-cost nature of VRP holds significant potential for small businesses and individuals, particularly in the current economic climate where cost savings are crucial.

Plaid, a financial technology company, has implemented AWS Single Sign-On (SSO) as part of its DevOps strategy. The company previously used Okta's SAML federation for user identity management but switched to AWS SSO due to limitations in the older solution. However, they faced challenges with the new system, such as support for temporary CLI/API access and compatibility issues with advanced MFA protection controls. To overcome these obstacles, Plaid developed an unconventional approach using Terraform modules and custom tools like megabin and a Chrome extension to automate the login workflow and enable seamless user access management. The company's experience highlights the benefits of integrating AWS SSO with existing DevOps tools, incorporating troubleshooting and support scenarios in automation, and having backup options for unforeseen issues.

Plaid, a financial services company, has introduced its third class of Plaid Accelerate startups. The program aims to support diverse and inclusive fintech communities by working with early-stage startups led by founders of color. This year's cohort includes Bluedot, Clockwork, and Manifest, which are tackling critical problems in the industry using innovative technology. Plaid Accelerate offers tailored guidance for each startup, including mentorship, office hours, access to a broader team, and free access to Plaid products throughout the program's duration. The startups will also have the opportunity to network with leading venture firms, law firms, technology companies, and more through the robust partner network of Plaid Accelerate.

Leading digital asset exchanges are now supported on the Plaid network, including Binance.US, Gemini, Robinhood, and SoFi. This expansion aims to bridge data portability gaps between Web3 and mainstream digital finance, allowing users to securely share their crypto account information with other services for financial planning, tax advisory services, net worth calculations, and more. Plaid's Investments API now supports crypto accounts along with various investment account types. The company is committed to enabling universal data access by connecting more financial institutions and fintech apps across North America and Europe.

The European Union aims to further develop an open finance ecosystem, enabling consumers and businesses to share their financial data with authorized third-party providers (TPPs) under explicit consent or lawful basis. Open finance has the potential to enhance business and individual consumers' ability to understand their financial situation, identify suitable products, and benefit from increased competition between providers. To achieve this, the European Commission should create a cross-cutting consumer data right, establish a clear liability framework, broaden the scope of TPP licenses, and let the market build open finance infrastructure, including integrating digital tools for consent management.

The European Commission is reviewing the Revised Payment Services Directive (PSD2) to assess its impact and gather evidence on its effectiveness in promoting open banking. The current PSD2 system faces four major challenges, including poor quality APIs, strong customer authentication issues, ongoing burdens on third-party providers (TPPs), and inconsistent adoption across the single market. To address these challenges, Plaid suggests that the Commission adopt five solutions to optimise user experience, create more flexible authentication methods, remove burdens on TPPs, descope Account Information Services from Anti-Money Laundering procedures, and enforce compliance with PSD2 and regulatory technical standards. The review presents an opportunity for the European Union to continue leading in tech-enabled innovations and broaden the scope of open banking to open finance, enabling consumers to better understand their financial lives, creating new financial services and products, lowering costs, and fostering more competition in the market.

The UK's Variable Recurring Payments (VRP) sweeping definition is changing how people pay for things, enabling account-to-account open banking payments to become the norm. VRPs allow consumers to approve transactions that vary in amount from month-to-month, making them ideal for recurring bills like gas and electric bills. The first feature being developed by Plaid is sweeping, which automatically moves funds between two accounts with the same owner, helping users avoid overdraft fees or take advantage of better interest rates. This technology can encourage savings through intelligent savings, help with loan and credit repayments, and automate financial goals, making it a valuable tool for businesses that offer current or savings accounts. The sweeping use cases defined by the Competition and Markets Authority (CMA) include avoiding overdrafts, loan repayments, and reaching financial goals, while excluding e-commerce purchases, cryptocurrency transactions, online gambling, and foreign exchange services.