Q: When using financial apps, I’m often redirected to the Plaid network and asked to give personal information. Can I feel safe using Plaid?
A: You’re asked to share your banking information and alarm bells in your head start ringing — as they should! The good news, though, is that, if the financial app you’re using is powered by Plaid, it’s safe to use. Plaid is a reputable company that uses encryption and industry-standard security measures to protect your information.
Here’s what you need to know about Plaid:
What is Plaid?
Plaid is a financial technology company that serves as an intermediary between financial services and their users. Apps, like Venmo and Robinhood, use Plaid to securely link their users’ accounts to their own platforms. This way, the financial apps never access their users’ information, relying instead on Plaid to supply it for them.
How does Plaid work?
When you sign up for any of the 3,000+ financial applications currently powered by Plaid, you’ll be asked to choose your financial institution from a Plaid-provided list. Next, you’ll enter your login ID and password. Some apps will have you create a new password at this point. Either way, once you’re logged in, Plaid securely shares the information you’ve chosen to link, such as your checking account number, with the app you’re using.
Is Plaid safe?
Plaid uses the highest levels of security possible to keep your information safe. When you link your checking account with a financial application through Plaid, the company instantly encrypts sensitive data and shares it with the application using a secure connection. Plaid will also never share your login and password info with the linked financial application.
According to the Plaid website, the company uses these measures to keep your information secure:
- End-to-end data encryption
- Multi-factor authentication
- Cloud infrastructure
- Robust monitoring
- Third-party security reviews
When using an application that’s powered through Plaid, practice standard online safety measures. Check the URL to ensure you have the correct site, look for the lock icon and the “s” following the “http” in the URL, and keep the security settings of your device updated and set to their strongest level. Stay safe!
Your Turn: What steps do you take to keep your data safe? Tell us about it in the comments.