How Plaid is riding on the digital revolution?
How Plaid is riding on the digital revolution?
Plaid enables connection between your bank accounts, age-old banks (Chase, Citi, Wells Fargo, etc.), enterprises (intuit, Zillow) and fintech companies (Coinbase, Robinhood). Plaid builds the digital data network similar to the physical network pioneered by Master Card and Visa. Plaid is currently valued at 13.4BUSD compared to 5.3BUSD Visa agreed to acquire. The acquisition didn’t go through due to anti-trust risks.
Connecting the fragmented financial ecosystem
There are more than 5000 banks and saving institutions in the USA. The early internet revolution enabled physical card providers such as Master Card and Visa to facilitate transactions everywhere. Regulation in Europe around open banking and sharing data gave rise to a suite of new fintech services and neobanks. Banks in the USA didn’t share information before to keep the customers locked but Plaid was founded at the right time connecting all these dots.
The age of digital financial services
People are increasingly getting comfortable buying/ investing online. New services are being launched every day and consumers are switching to services that provide a superior experience. Fintech companies need to solve consumer problems rather than working with obscure banking databases. Plaid helps these companies to reduce time to market and onboard any consumer from any bank.
The age of API economy
When Plaid founders decided to build consumer budgeting software, they were confronted with a huge problem: accessing consumer transactions from different banks and building a unified banking API. Of course, Other companies can copy Plaid, but it got the headstart working with legacy financial systems and their huge list of 404 errors. In this process, Plaid built a robust data transfer network.
What do you think about the future of your industry? Do you have a Plaid in your industry?