What is an Application Programming Interface (API)?Īn Application Programming Interface (API) is built into applications, including website applications. Since data is encrypted, your account login credentials and any other data Plaid uses remain secure.
Plaid goes the extra mile to protect sensitive data by ensuring that it only transfers information required by the third-party app. This encrypted data is transferred to the third-party app via an application programming interface (API) and decrypted at the receiving end. Once you’ve downloaded the third-party app you’d like to use, Plaid will prompt you to insert the username and password associated with the account intended to be linked to that app.Īfter collecting the login credentials you provided, it then gathers and encrypts the financial information required by the third-party app (such as account balance or credit card information, for example). Several financial services, budgeting, and portfolio management apps that use Plaid need access to accurate financial information in real-time to work correctly or make informed suggestions. It’s easy to do – and you maintain a level of control as to who has access to your data at any given time. Plaid allows you to link your personal financial information to thousands of third-party financial apps and service providers. Visa nearly acquired Plaid back in 2020, but the deal fell through. It ensures that a secure connection is established while giving you the option to only share the necessary information with third-party apps.Īt the same time, it also ensures that your banking login credentials remain secure. These apps and sites can only function if they have access to your personal financial information in real-time. Plaid’s software acts as a direct intermediary between your bank accounts and third-party financial apps and websites.
In short, it’s a platform created to streamline communication between your bank accounts and financial services apps that require your banking information. Plaid is a fintech company based in North America.
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