Is Plaid Safe?
You are one in four Americans already employing one of the most innovative financial techniques by using financial services such as Venmo, Betterment, You need a budget and Robinhood. Plaid is a handy financial intermediary that is used to connect your bank accounts to various programs and applications. Now it is quickly becoming a household name among financiers.
With any software that has access to financial data, customers want to know exactly how their information is being used. Also, they need a reliable guarantee that their money is safe. Here's everything you need to know about Plaid and how it keeps your banking information secure.
What is Plaid and How Does it Function?
Plaid is a fintech company that acts as an emissary connecting your bank account and the financial application you use. When a user links a bank account to the application with which the current platform works, the financial intermediary accepts the logins they provide to log into a personal account, encrypts the requested financial data (account balance), and only then transfers them to the app through a safe compound.
The platform hides any login details sharing only the information a user needs. It gives you a great way to easily link a bank account with over 3000 separate financial tools. It maintains complete security and control using a secure API.
How does an API work and what is the API?
Application Programming Interface (API) is a function of the chosen website or app server that works with additional websites and applications. API interacts with the separate data-binding apps without leaving the site you are currently in. A great example could be Google Calendar links or going to any online banking site.
Plaid provides financial applications with link bank accounts. The developers use API keys to create a free account and use the keys to securely and quickly communicate financial information.
How Does Plaid Keep Your Privacy?
Users can manage personal information passing to this financial tool. Any user has the right to independently decide on a given tool either it should provide apps with the following:
- Registration and routing numbers;
- Transactions;
- Balance;
- Investment holdings;
- Credit card balance and interest rates;
- Student loans;
- Account profile information.
The Privacy Policy states that they will never sell or share your personal information. Plaid only shares data with companies that you have given permission to.
How Safe is Plaid?
Even when a company promises to keep user financial data private, security is still a concern. However, the following tool makes sure that your financial information is kept safe from malicious attempts to access and theft of assets.
To ensure strong security, Plaid relies on the following:
- xData encryption from banks, apps, and customers (it saves the data);
- Advanced Encryption Standard (AES) is applied for collected financial data;
- Transport Layer Security (TLS) preserves the financial data transmitted between the apps;
- It manages a cloud base that has been made with safety using safety technologies being involved to give adaptable and responsive security;
- Multi-Factor Authentication (MFA) protects the identity of a user and secure login. It also functions to prevent unapproved account login.
- 24/7 verification provides support for any potential issues.
Moreover, independent security trial is accepted by high-security technology companies to which the tool belongs. Used third-party testing keeps the financial program flawless. It gives any user more control over finances without discrediting protection.
Why is Plaid Asking to Connect to a Bank Account?
The tool connects you to the bank account in order to give a safe link between a financial institution and apps that require any financial information. You maybe get used to the fact that when you get a small loan from organizations such as https://directloantransfer.com/500-dollar-loan/, they will not ask you for this kind of information, but Plaid is on whole another level. It uses a connection to a bank account to retrieve any data that apps require to protect users' private data.
Popular Apps for Individuals and Businesses
Plaid supports over 3000 financial applications including those that you may already be using:
- Acorns;
- You Need a Budget;
- Robinhood;
- Upstart;
- Dave;
- Betterment;
- Pillar;
- Venmo;
- Coinbase;
- Carvana;
- EllieMae.
Whatever app you use to connect to your bank or credit account will soon be Plaid. It's safe, secure, and designed for customers and businesses looking to make secure financial access completely hassle-free.
Most users still refuse to enter online banking credentials outside of the bank's official website. It would be reasonable to learn more about platform security before sharing financial data. The platform is a quality, safe, proven system that has established partnerships with most major financial institutions and thousands of credit unions across the country.
Plaid is a trusted provider of major financial apps and services such as Venmo, Robinhood, and Stripe. Banks use the platform because they trust it. However, it is recommended that you learn more about platform security to help you make an informed decision.