Plaid accuses Stripe of underhanded tactics over new open banking product

Launched yesterday by the payments platform, Stripe Financial Connections will be in direct competition to Plaid, as it will allow users to connect to their customer’s bank accounts to access financial data, speeding up certain types of transactions.

Perret’s tweet came in response to Jay Shah’s update on Twitter which read: “We’re launching Financial Connections today, enabling businesses and their customers to safely share their financial data. Businesses can go directly to Stripe to access a privacy-first authentication flow and our new data API […] So fast forward 2 years, 10+ Stripe products, and many, many users later, we realized that businesses who use Stripe also wanted this API. They had similar needs to ours like preventing failed payouts, account takeovers, and checking balances before payments.”

Perret’s displeasure at the announcement came as a comment on the thread:

Wow! Jay, you took interviews with Plaid & asked probing questions multiple times over the past few years, and your team sent repeated RFP's (under NDA!) to us asking for tons of detailed data. I wish y'all the best with these products, but surprising to see the methods.

— Zachary Perret (@zachperret) May 4, 2022

Denying Perret’s accusation, Shah stated:

Zach, sorry you feel this way, but this isn’t true and I think you know that. You reached out to me repeatedly—I never reached out to you for information. Stripe did an RFP because we work with partners for this product, and we had hoped to include Plaid.

— Jay Shah (@jay_ssh) May 4, 2022

In a later tweet, Shah added: “They interviewed me 8 years ago in 2014, before I joined Stripe. Since then, I met with them a few times (all at their request), outside of the RFP. These conversations had no probing on Plaid's business.”

The disagreement continued on Hacker News, where Perret commented: "Plaid founder here. Stripe does not integrate with any bank API's directly (AFAICT). They wrap two aggregators, MX and Finicity to build this product. (Also, not sure what MX products they are using, but MX itself is an aggregator of aggregators, including others such as Yodlee.)"

"On pricing, Stripe's listed rates are 30-200% higher than Plaid rates (perhaps due to high vendor costs). That said, if anyone does have feedback on where Plaid pricing is prohibiting new use cases, we'd love to hear! I'm zach at plaid if folks would like to discuss."

To which Stripe operations manager Edwin Wee countered: "Edwin from Stripe here. Stripe does integrate directly with banks. In our beta period, most volume we’ve seen has been over bank APIs. Some banks do not have APIs—we use financial partners to connect with them, and we’re talking with many banks in hopes that they will enable direct API access soon."

"Our pricing is upfront: https://stripe.com/en-us/financial-connections#pricing. We’ve worked with a large beta group of users to make sure the pricing is in line with what they see in the market."

Stripe Financial Connections has been launched in the US, with no further information about when or if it will be brought to other markets.

Finextra has reached out to both Stripe and Plaid for comment.

This piece has been updated to include quotes from Hacker News.