While it might be overlooked, Plaid is one of the best payment gateways and the $10+ billion startup is looking to move into new territory.
The company announced new tools for identity verification – a fundamental part of any e-commerce transaction – and fraud prevention. The additions to its portfolio mean it is in direct competition with payments giant Stripe.
“We are introducing Plaid Identity Verification (IDV) and Monitor – a comprehensive verification, AML and KYC compliance solution available in early access starting today,” the company said. “Many of you have told us that having a frictionless identity verification experience is essential across a variety of use cases: from account opening and funding, to commerce and lending. .”
The expansion, announced at the Plaid Forum event, is notable as Stripe recently announced Financial Connections, allowing its customers to connect directly to their customers’ bank accounts.
The two fintech giants are increasingly moving into each other’s major watersheds, setting them up for a pretty epic battle.
Talk to TechCrunchPlaid’s chief identity officer, Alain Meier, said account connectivity has traditionally been its primary focus, and adding other fintech companies — such as Robinhood and Chime — was part of the plan.
“This ultimately helps build trust and security across the entire ecosystem as more people engage with new fintech apps and services,” Meier said. “That’s why we’re expanding our platform to now include identity verification and new tools for fast and easy account funding and disbursements.”
The battle to become the dominant fintech company has been raging for many years, as Stripe, Plaid and other startups seek to take on incumbent banks at their own game.
Facilitating online payments and offering merchant services is an incredibly lucrative – and competitive – business.
When Stripe introduced Financial Connections, Plaid co-founder Zach Perret accused the company of copying its products in a now-deleted tweet, prompting a rebuttal from Stripe management.
Patrick shared this note internally about Financial Connections/Plaid kerfuffle. I’m excited to put it behind us, and look forward to continuing vibrant competition in fintech (which customers benefit from!) in the future. pic.twitter.com/LOnlGIPDdqMay 6, 2022
Ultimately, there is almost certainly enough space in the online payments and services market for two or more large companies to co-exist.
Plaid explicitly moves into key areas of Stripe, and vice versa, is good for businesses and customers for their services.