Plaid Introduces Auth Product, Adding Thousands of Banks to API
If you’re a user of a personal finance app that relies on data provided from your banks, there’s a very strong chance you’ve used Plaid’s API to make that connection happen. Prior to today Plaid offered quick authentications for approximately 3,800 banks, allowing users to simply log into their accounts and provide various apps with the info they needed. Now the number of supported banks is set to increase three-fold as Plaid unveils its new product Auth.
As TechCrunch reports, Auth will enable Plaid-powered apps to connect to nearly any U.S. bank or credit union — around 11,500 in total. Previously many of these institutions were unable to participate in Plaid’s API because their technology may not have been as advanced as some of the larger players. In these cases, more cumbersome authorization processes — such as having users verify micro deposit amounts — were utilized instead.
Even with Auth, Plaid co-founder and CTO William Hockey warns that not all of the institutions will grant immediate authentication. This is because Auth will need to adapt to the numerous authentication methods used by various banks regardless of the level of technology they’re using. Hockey explained, “Everybody in the US can actually use this product now. And some of those [connections] are super quick and instant, and some of those maybe take a day to verify, but what we’re doing is we’re wrapping all of that in the product. And so you as a developer, you don’t have to worry about all of the different authentication methods at some of these banks.” TechCrunch notes that the introduction of Auth is also a win for app users as the Plaid’s API will automatically identify the fastest connection method for each institution.
Incidentally this the second big announcement Plaid has had in recent weeks. Just last month, the company announced it was acquiring rival startup Quovo in a deal that sources valued at around $200 million. Despite the two companies often being compared, Quovo had more of a focus on brokerage accounts than Plaid. This led Hockey and his co-founder Zach Perret to remark at the time, “Financial applications have historically used Plaid primarily to interact with checking and savings accounts. In acquiring Quovo, we are extending our capabilities to a wider class of assets.”
If their acquisition of Quovo didn’t already make it clear the Plaid was a FinTech giant on the rise, the introduction of Auth certainly does. In fact, a recent Forbes article ranked the company as the eighth largest FinTech firm in America with a valuation of $2.65 billion. With the way Plaid’s past few weeks have gone, expect that ranking to climb throughout 2019 and beyond.