[HN Gopher] Stripe Financial Connections
       ___________________________________________________________________
        
       Stripe Financial Connections
        
       Author : ianhawes
       Score  : 284 points
       Date   : 2022-05-04 16:05 UTC (6 hours ago)
        
 (HTM) web link (stripe.com)
 (TXT) w3m dump (stripe.com)
        
       | [deleted]
        
       | nope1234 wrote:
       | I honestly can't believe that there's enough people dumb enough
       | to give their bank username/password combo to strangers to make
       | services like this work.
       | 
       | Nope nope nope.
       | 
       | As a user, I'd never use any service that is plaid based, I don't
       | even care that "they have proper api access now". Even though
       | I've been fan of other stripe offerings I'd never use this
       | either. It's beyond shady.
       | 
       | Friends don't let friends give out their banking creds.
        
         | lambda_lord wrote:
         | That's not how the service works. You don't give Stripe your
         | banking credentials, you log into your bank directly:
         | https://stripe.com/docs/financial-connections/fundamentals#a...
        
           | wmf wrote:
           | No, it looks like you're logging in to your bank but you're
           | actually giving your credentials to Stripe.
        
             | lambda_lord wrote:
             | If your bank supports Oauth it won't share your
             | credentials:
             | 
             | >Stripe generally defaults the authentication flow to OAuth
             | if available at the financial institution....OAuth is an
             | open standard authorization protocol that allows users to
             | let applications (for example, Stripe) access their
             | information within other applications (for example, bank
             | apps) without having to share their login credentials.
             | 
             | But for banks without Oauth you DO give your credentials to
             | Stripe:
             | 
             | > For these banks, end users provide credentials to Stripe
             | or one of our trusted partners.
        
       | jasonhoch wrote:
       | By clicking "Start Now", I try to visit
       | https://dashboard.stripe.com/financial-connections/applicati...
       | and it redirects me to
       | https://dashboard.stripe.com/test/dashboard. Would love to see
       | more!
       | 
       | Although, from reading the docs, a lot of the products that I'm
       | interested are still "Coming Soon" (confusingly a different
       | verbiage but identical in meaning to "Private Beta"?): -
       | Transactions - Other data-powered products
        
         | edwinwee wrote:
         | Ah, is your Stripe account live (i.e. in livemode with payments
         | activated)? We'll look into make this smoother, but right now
         | you'll have to leave testmode to continue.
        
           | pbreit wrote:
           | I keep getting "An unexpected error occurred when trying to
           | use instant verification."
        
       | [deleted]
        
       | nitsky wrote:
       | Is this good news or bad news for Plaid?
        
         | kadomony wrote:
         | Competition is healthy. Whether it's good or bad, we'll see. No
         | one can divine that, but I get the sense that Plaid's product
         | team is a bit worried right now.
        
           | FintechRisen wrote:
           | I think this is the biggest thing here. User credentials need
           | to be protected and hopefully this type of open-market
           | approach brings about more democratization of data.
        
           | nitsky wrote:
           | I wonder why it took so many years for Stripe to start
           | competing in this area.
        
             | cj wrote:
             | One possible reason is that ACH payments are MUCH more user
             | friendly if they can be initiated by an end-user
             | authorizing their bank account (compared to digging up
             | their account #, routing #, etc and entering the info
             | manually).
             | 
             | ACH payments are essentially free to process (or a very
             | small flat fee). This is very different from credit card
             | transactions that charge a % of the entire transaction.
             | 
             | If ACH / direct payments from bank accounts became more
             | common through services like Plaid and Stripe's new
             | service, it could mean less fees (less revenue) for Stripe
             | to collect. Which could explain why it's not something
             | Stripe jumped into earlier.
             | 
             | TLDR: if I had to guess, there's more money in processing
             | credit card payments, and much less money in facilitating
             | ACH transactions.
        
         | axg11 wrote:
         | This is bad. Stripe doesn't have to provide the best service
         | here. A lot of companies already use Stripe making the barrier
         | to trying this out very low. Likewise for startups, if you're
         | already trying out Stripe billing for your MVP you're more
         | likely to use another Stripe product than to try out Plaid.
        
           | kadomony wrote:
           | I'd agree. A startup looking to use Stripe Atlas now has
           | access to this for standing up their services? Plaid is
           | basically disqualified from the start, given how cohesive the
           | Stripe platform is.
        
           | astlouis44 wrote:
           | Yeah exactly this, Plaid is probably in for a rough ride long
           | term. Stripe will likely steamroll them.
        
       | zinekeller wrote:
       | Question: are US banking really this dysfunctional? Where I'm
       | from, a bank consortium already provided unified login services
       | (while banks still have their own websites, as a merchant you
       | only need to integrate the consortium-provided APIs rather than
       | using Plaid) simplifying things.
        
         | danielmarkbruce wrote:
         | Banking is less concentrated in the US than other countries.
         | There are thousands of banks here. So it's harder for industry
         | protocols to move forward.
        
         | pbreit wrote:
         | The US has 10,000 financial institutions. Wherever you are from
         | maybe has 20.
        
         | chrisseaton wrote:
         | In the US your public bank account number is effectively a
         | password to debit your account! There's literally no
         | authorisation at all!
        
           | lxgr wrote:
           | That is the case in most of Europe as well (under SEPA Direct
           | Debit), and has been for many years now.
           | 
           | I've not had to dispute an ACH debit yet, but at least at
           | most German banks, it's literally a single click and the
           | money is back in your account - up to 8 weeks after the
           | payment (any reason, no questions asked), and up to 13 months
           | in case of fraud ("no mandate").
        
           | IG_Semmelweiss wrote:
           | Can you elaborate?
           | 
           | I believe you need a specific bank authorization to do ACH
           | withdrawal using only routing and Account#. Plus, your
           | beneficiary bank does screen for such services given out to
           | clients very closely. No random joe schmo can do auto ach
           | debit
           | 
           | Unless you are referring to passing forged checks, I'm not
           | sure what you mean by this.
        
             | pbreit wrote:
             | "I believe you need a specific bank authorization to do ACH
             | withdrawal using only routing and Account#"
             | 
             | No. All you need is an account number and routing number
             | (which are printed on paper checks). The ACH originator is
             | responsible for ensuring the numbers are owned by the
             | payer.
        
             | chrisseaton wrote:
             | My understanding is that in the US to pay your rent you
             | either send a literal paper check, which had no serious
             | authorisation at all, or your land lord reaches into your
             | account using your bank account number and debits it,
             | without you having to approve.
             | 
             | If not - why do people protect their bank account numbers
             | in the US? In the UK mine is printed on my bank card -
             | anyone can read it off.
             | 
             | It's like social security numbers in the US - they became
             | passwords when they weren't supposed to be.
        
               | lxgr wrote:
               | > your land lord reaches into your account using your
               | bank account number and debits it, without you having to
               | approve.
               | 
               | This is how many people pay for rent in Germany (and I
               | strongly suspect elsewhere) as well.
               | 
               | If they take too much, you can get it back with a single
               | click in your bank account.
        
               | isbvhodnvemrwvn wrote:
               | Quite interesting. In Poland a lot of places have their
               | bank number just on their website if you want to donate
               | something, I don't think you can place a debit like that.
        
               | lxgr wrote:
               | Bank accounts like that often have outgoing direct debits
               | blocked to prevent fraud, as far as I know.
               | 
               | (I don't think there is a registry - this would simply be
               | a bank-side setting to auto-decline all requested direct
               | debits.)
        
           | vageli wrote:
           | > In the US your public bank account number is effectively a
           | password to debit your account! There's literally no
           | authorisation at all!
           | 
           | Don't you also need the routing number? How does this differ
           | in other countries or anywhere that checks are used?
        
             | the_svd_doctor wrote:
             | The routing number of each bank is public :-)
        
               | vageli wrote:
               | Yes but banks can have several routing numbers.
        
             | pbreit wrote:
             | The routing and account numbers are printed on every paper
             | check in the US. Those are all that you need to process an
             | ACH. The onus is on the ACH originator to make sure the
             | numbers are not stolen.
        
             | bzxcvbn wrote:
             | A check needs a signature and has some security feature
             | built-in. You might argue that it's not sufficient, but
             | it's the same deal as paper money for example. The
             | cost/benefit ratio is too low for counterfeiting checks to
             | be useful, most of the time.
        
               | [deleted]
        
               | [deleted]
        
             | chrisseaton wrote:
             | Yes the public account number and routing number. Which are
             | printed on my card, statements, might be read out loud,
             | etc.
             | 
             | My bank in the UK would not let you debit my account with
             | just the numbers. I'd need to authorise it.
             | 
             | How do you stop people debiting your account with whatever
             | they want?
        
               | xur17 wrote:
               | > How do you stop people debiting your account with
               | whatever they want?
               | 
               | Short answer: you don't. Long answer: robust "fraud"
               | controls. It's a shit-show.
        
         | rglover wrote:
         | Yes. Some banks still run COBOL behind the scenes here.
        
           | zinekeller wrote:
           | ... and I'm pretty sure a majority of banks here still runs
           | COBOL, but it didn't stop them creating a consortium and
           | simplifying things!
        
             | [deleted]
        
           | paxys wrote:
           | What they run on their backend doesn't really matter. If they
           | can provide a website with username/password login, they can
           | have an OAuth layer as well. It isn't a technical problem but
           | a business/priorities one.
        
           | yohannparis wrote:
           | running COBOL behind the scenes have nothing to do with an
           | easy API access and a consortium for interbanking.
        
             | rmbyrro wrote:
             | Maybe they pointed out as an indication that some financial
             | institutions in the US are not _modern_ technologically
             | speaking, and that may be a cause for lacking better APIs?
        
               | ericmay wrote:
               | That was probably the intention but I think that isn't a
               | core reason. It's more about business/tech incentives
               | around these APIs. The industry is more risk-averse, and
               | frankly there isn't necessarily a great business case for
               | doing integrations if you're a big bank because you don't
               | want to be commoditized into "pipes" and then have to
               | compete on low-margin products all the while the middle
               | companies have better margins and skim off the top of
               | you. At least on the consumer side. There's this meme
               | that banks are technologically backwards and all that,
               | and I don't think that is true or a good frame of
               | reference to have. The scale, complexity, regulatory
               | environment, and risk-aversion when something bad happens
               | are far and away more relevant factors than technology
               | is.
        
               | rmbyrro wrote:
               | I agree, but don't think the original comment deserves
               | down voting. It's an acceptable argument. Might not hold
               | water, though.
        
           | haswell wrote:
           | For some systems, this is arguably a feature. Banks are
           | rightly cautious about touching core transaction processing
           | systems, systems that cost millions per minute when down.
           | 
           | But the use of COBOL generally doesn't extend to the consumer
           | facing product, or the APIs that support those consumer
           | facing experiences.
           | 
           | Banks may be backwards, but the use of older languages is not
           | one of the primary reasons.
        
             | quadcore wrote:
             | It makes me trust them more when they use old software that
             | I never got to complain about.
        
         | animal_spirits wrote:
         | I remember about 4 years ago I read online that most bank
         | passwords did not even check for upper case or lowercase
         | characters. I didn't believe it, but to my surprise I entered
         | my password with RaNDoM cASe letters and it unbelievably logged
         | me in. This was Chase bank, and I believe it has been fixed
         | since then. But just goes to show how far behind banking
         | systems have been.
        
         | codegeek wrote:
         | "are US banking really this dysfunctional?"
         | 
         | Yes very much. A lot of banks don't even have 2FA and most that
         | do only offer SMS based. APIs, forget about them. Walk before
         | we can run.
        
       | boringg wrote:
       | Is this logic right or wrong: All of these fintech companies
       | allow for more convenient movement of money and integration with
       | applications etc however they are adding additional costs to all
       | transactions. I.e. were trading convenience for cost?
        
         | mwt wrote:
         | Are they adding costs? The baseline of ~3% to wire money seems
         | already high.
        
         | pbreit wrote:
         | This potentially lowers payment processing costs by making ACH
         | a viable alternative to cards.
        
       | mrlase wrote:
       | The pricing here seems asinine. $0.10/successful API call?
        
         | wmf wrote:
         | This data is worth far more than 10 cents.
        
       | tomatowurst wrote:
       | guessing this doesn't work with Canada
        
       | cercatrova wrote:
       | I wonder how this compares to Column, since the founder of Column
       | also cofounded Plaid. I see both founders' comments in this
       | thread it looks like but the Column founder doesn't seem too
       | happy about it [0].
       | 
       | There also seems to be some vindication by the Bolt founder,
       | based on his Twitter thread about how Stripe handles corporate
       | development [1][2], it really reminds me of Paul Graham's essay
       | not to talk to them, lest the same thing happen to you [3].
       | 
       | [0] https://twitter.com/pitdesi/status/1521915016668090368
       | 
       | [1] https://twitter.com/theryanking/status/1485784823641755648
       | 
       | [2] https://twitter.com/pitdesi/status/1521906115914526721
       | 
       | [3] http://www.paulgraham.com/corpdev.html
        
         | healthbjk wrote:
         | Column is a bank. They've bought a bank charter and are aiming
         | to cut out Banking as a Service middlemen
        
           | philip1209 wrote:
           | Yeah - my impression is that Column is depth-first for the US
           | banking system, whereas Stripe is breadth-first for multiple
           | markets
        
       | whockey wrote:
       | []
        
         | nightpool wrote:
         | It's interesting to compare this comment with one of the other
         | top comments on HN right now, an explanation of how Google's
         | culture of promoting users for solving "hard problems" is
         | ultimately a terrible, terrible strategy for their users and
         | their company. https://news.ycombinator.com/item?id=31262428
         | 
         | As engineers, we should to step away from our egos and our
         | desire to do something "interesting" and focus on where our
         | solutions actually solve real problems, like Stripe's products
         | (often, not always!) do. Whether something is "middleware" or
         | "not interesting" has nothing to do with how _useful_ or
         | _valuable_ it is.
         | 
         | I'm sure there are plenty of people working at Plaid who are
         | really interested and dedicated in working on the kind of
         | middleware that their co-founder is denigrating here. It's a
         | shame they have to work for a company where that kind of polish
         | is pushed aside in favor of ambiguous "innovation". As an
         | engineer and a customer, I know which kinds of companies and
         | engineers I want on the other side of the table when
         | considering business partners, and--going solely from your
         | comment--it sounds like Plaid isn't one of those companies.
        
         | sicromoft wrote:
         | For those wondering, this was originally a salty comment by one
         | of Plaid's founders calling out Stripe for being "so damn
         | boring".
        
         | 88913527 wrote:
         | It's probably financially optimal to put a nice veneer on an
         | existing solution than to make something whole-cloth. They're
         | running a business, not a charity, and besides -- as the
         | consumer, why would you care? All you see is the facade
         | anyways; unless you're making a point that the API's are
         | actually leaky abstractions and the facade isn't that good (and
         | I would respect that argument, if it were the case).
        
         | whatshisface wrote:
         | If Stripe knows how to pay developers appropriate salaries
         | (this is the under-discussed reason for SV companies being the
         | only ones who can make good APIs - BoA is never going to pay
         | their web team more than they pay their web team's department
         | head, that is not possible for their culture) to develop
         | appropriate interfaces on things, then more power to them if
         | they can do very simple things to profit in the context of the
         | oversights of other companies.
        
         | PragmaticPulp wrote:
         | Screenshot of deleted comment:
         | https://twitter.com/pitdesi/status/1521915016668090368/photo...
        
           | reducesuffering wrote:
           | GP clearly retracted his statement. Regardless of whether
           | it's right or wrong, what I'm much more sure of is people
           | will be far too careful in expressing thoughts if the moment
           | it's out there it will be forever imprinted into the internet
           | and associated with themselves. I wonder if it's possible for
           | truly ephemeral messaging wiped-clean when you would like,
           | given the issues with someone just writing it down
           | physically.
        
         | lambda_lord wrote:
         | This kind of comment throwing shade on your competitors does
         | not reflect well on you or your companies.
         | 
         | People want alternatives to Plaid. How do you know they are
         | simply wrapping 3rd parties instead of building these deep
         | integrations themselves?
        
           | stu2b50 wrote:
           | Yeah, have to say, the level of knee jerk defensiveness here
           | and on Twitter from cofounder level figures from Plaid does
           | not exactly evoke confidence in their ability to outcompete.
        
         | kbyatnal wrote:
         | lots of respect for what you and the team have built at Plaid,
         | but this is exactly the opportunity. As a developer who's
         | worked at multiple fintechs and integrated with Plaid more
         | times than I care to remember, it's an incredibly frustrating
         | experience.
         | 
         | Ask any fintech and they'll tell you - Plaid is simultaneously
         | the best and worst vendor they use. Best because there's no
         | real alternative, but worst because it causes so, so, so many
         | headaches with how unreliable the product is. The time spent
         | building product workarounds at every company to account for
         | Plaid issues is tremendous.
         | 
         | If Stripe thinks they can build something better, then I'd
         | really love them to try.
         | 
         | Edit: William (co-founder of Plaid) seems to have deleted his
         | comment, but it was basically accusing Stripe of repeatedly
         | copying other companies.
        
       | metadat wrote:
       | See also: https://news.ycombinator.com/item?id=31263288
       | 
       | "Stripe releases Plaid-like project, Plaid CEO objects to
       | process"
       | 
       | Different day, same old stripe. Beware.
        
         | Brystephor wrote:
         | not a different day. that post is from 3 hours ago.
        
           | metadat wrote:
           | I meant that _today_ is a different day from yesterday, and
           | the day before..
           | 
           | It's a common English idiom.
           | 
           | I don't have the reference links handy but the TL;DR is that
           | Stripe has played dirty lots of times before. The formula is:
           | 
           | 1. Pretend they want to acquire a company with a product they
           | like
           | 
           | 2. Then, once they waste enough of the competitors time
           | (buying buffer enabling them to figure out the secret sauce)
           | 
           | 3. Clone stamp the competitors product, fucking them over
           | royally. Also leverage the tremendous public reach,
           | visibility, and clout of Stripe itself to promote their
           | clone.
           | 
           | It's a very ugly and distasteful way of doing business. It
           | aligns with the values of the Farenghi on Star Trek.
           | 
           | It's naiive on the victims part, sure, but Stripe is
           | dishonest and shan't be trusted.
        
             | iamcreasy wrote:
             | I do not know about other instance. Could you please share?
        
               | metadat wrote:
               | "Stripe hiring issues make some lose job offers"
               | 
               | https://news.ycombinator.com/item?id=29403976
               | 
               | I think I was confused, and I apologize. There was some
               | prior drama with the Bolt founder claiming Stripe was
               | colluding against them.
               | 
               | It seems an error on my part, an honest one but still
               | incorrect. Sorry, again.
        
       | yohannparis wrote:
       | My question is does this use banks own API, or works like Plaid
       | by doing web-scrapping? I'll prefer the former.
        
         | illnewsthat wrote:
         | From https://stripe.com/docs/financial-
         | connections/fundamentals#h...
         | 
         | > With the authentication flow, your user logs into their bank
         | either through an OAuth (bank-hosted) or non-OAuth flow to
         | authenticate access to their accounts.
         | 
         | > Stripe generally defaults the authentication flow to OAuth if
         | available at the financial institution. Your integration
         | doesn't need to treat OAuth accounts differently than non-OAuth
         | accounts.
        
         | naiwenwt wrote:
         | Plaid moved away from scraping years ago, most integrations
         | these days are through APIs.
        
           | amonroe369 wrote:
           | No they didn't. November 2021 was not that long ago.
           | 
           | "You may be a Class Member if you are a United States
           | resident and you connected a financial account to an app
           | between January 1, 2013 and November 19, 2021....
           | 
           | "This class action alleges Plaid took certain improper
           | actions in connection with this process. The allegations
           | include that Plaid: (1) obtained more financial data than was
           | needed by a user's app"
        
             | naiwenwt wrote:
             | Hence "most integrations", not all.
             | 
             | Citing a settlement date range with language like "may be a
             | class member if you connected a financial account to an
             | app" doesn't really refute my point.
        
       | aristidb wrote:
       | Curious that they translated it to German based on my phone
       | settings for a product that only supports US banks? (I don't mind
       | that it is US banks, just... why did they pay a human to
       | translate it?)
        
       | slugiscool99 wrote:
       | How much longer are we just going to keep eating up whatever the
       | Stripe PR machine churns out? They did a great job with payments
       | but a lot of their auxiliary products are just worse versions of
       | other businesses.
        
       | kaiuhl wrote:
       | I work at one of the companies that integrated Financial
       | Connections during its beta, moving from Plaid Auth. We use the
       | link to bank accounts for instant account verification and as a
       | fraud signal for ACH payments. However, we definitely can't do a
       | better job than Stripe could at risk analysis, provided they had
       | access to metadata on the bank account when processing the
       | payment and could provide insights from their entire platform.
       | Now they do.
       | 
       | I'd guess the big benefit here, besides taking some of Plaid's
       | existing customers, is what's possible now that Connections lives
       | alongside the other things Stripe offers like ACH, loans, and
       | identity verification.
        
       | propogandist wrote:
       | if you've ever used Yodlee or a similar "verify your bank"
       | service, change your bank account password and you'll start
       | seeing a surge in "suspicious login attempts" alerts (if your
       | bank notifies you of such things) as these data scraping services
       | are constantly trying to check-in on your personal financial
       | activity
        
       | a13n wrote:
       | Does it collect your bank username and password, or work directly
       | with banking APIs? Every time I see some service trying to do
       | this via Plaid I cringe.
        
         | bm5k wrote:
         | Yeah, giving out my banking authentication info is a hard nope
         | for me & I discourage everyone I know from using or
         | implementing anything using plaid.
        
         | lambda_lord wrote:
         | https://stripe.com/docs/financial-connections/fundamentals#a...
         | 
         | You log into your bank directly and then grant access to
         | Stripe.
         | 
         | I presume, behind the scenes, your bank gives Stripe a single
         | application token (not your credentials) to pull read-only
         | data.
         | 
         | (edit) But this is only for banks supporting Oauth, it seems
         | for others it DOES give Stripe your credentials.
        
       | jollyjellie wrote:
       | I have been an advocate of Stripe but today I am quite
       | disappointed with Stripe. Is this what happens when a company
       | becomes big with thousands of employees? Copying smaller
       | companies' product(s) while having a "partnership" with them? I
       | wish they released an actual competing product, not a copy.
       | 
       | This discourages SO MANY startups.
        
         | wmf wrote:
         | _an actual competing product, not a copy_
         | 
         | How many ways are there to do this?
        
       | kintalo wrote:
       | The limit to only daily pulls and up to 180 days of historical
       | data is pretty disappointing. Would expect Stripe to push the
       | envelope here and move down to near-instant updates and full
       | historical data. This is basically a knockoff of existing
       | solutions done at par or worse which is surprising to see from a
       | company like Stripe. Maybe they've lost a bit of their magic or
       | focus. Will be interesting to see how everyone adapts and
       | improves to this announcement.
        
       | kadomony wrote:
       | Plaid has left the chat.
        
         | dylan604 wrote:
         | What was the phrasing for the server kicking someone out?
         | 
         | Plaid was booted from the chat?
        
           | minimaxir wrote:
           | Plaid slaps Stripe around a bit with a large trout
        
       | peter_l_downs wrote:
       | Very excited for this. One of the major issues with Plaid is
       | their poor support for commercial banks -- for instance, SVB. If
       | Stripe can provide more reliable connections to commercial banks,
       | this will be an extremely valuable alternative.
        
       | sergiotapia wrote:
       | https://twitter.com/pitdesi/status/1521906115914526721
        
         | cagr wrote:
         | Not a good look, the lawsuit is going to be interesting for
         | sure.
        
       | vincentmarle wrote:
       | Plaid CEO has some words for Stripe:
       | https://twitter.com/zachperret/status/1521898404061716480
        
         | cagr wrote:
         | Ryan Breslow vindicated again...
        
           | tomatowurst wrote:
           | I'm genuinely worried for that guy. He's exposing powerful
           | connected people and I can't really see that end well. It's
           | not like people retweeting and liking his tweets have any
           | sort of power like what is alleged.
        
         | PragmaticPulp wrote:
         | EDIT: The accused person has denied these allegations, claiming
         | that Plaid reached out to Stripe (not the other way around) and
         | that the RFPs were because Stripe invited Plaid to be part of
         | the product:
         | https://pbs.twimg.com/media/FR8FjJ9VsAAMY_k?format=jpg&name=...
         | 
         | > 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.
         | 
         | I don't know. Talking with a company shouldn't disqualify you
         | from ever working on a competing product. Sending an RFP
         | doesn't mean you can never build your own product.
         | 
         | The Plaid CEO is trying to anchor the conversation around
         | malicious intent, but it's not hard to imagine a scenario where
         | this product-minded person legitimately explored working with
         | Plaid, legitimately explored partnership opportunities at
         | Stripe, and walked away believing it would be better for Strip
         | and for himself to build a competing solution at Stripe.
         | 
         | Plaid's product isn't entirely novel. In my experience _as a
         | consumer_ it has failed at least 3 /4 times I've tried to use
         | it with my financial institutions. I'm frankly more surprised
         | that it took this long for anyone to enter their space to
         | compete against Plaid.
        
           | lambda_lord wrote:
           | They are not describing a job interview. They are describing
           | a product interview between businesses for some sort of
           | partnership.
        
             | PragmaticPulp wrote:
             | Right, but that doesn't imply malicious intent and it
             | doesn't disqualify them from building their own.
             | 
             | Talking to companies about their product and then later
             | deciding you'd rather build your own isn't really
             | surprising. Plaid was definitely aware that Stripe was a
             | potential competitor going into those meetings.
        
           | mritchie712 wrote:
           | yeah, Stripe has a totally reasonable defense for this:
           | 
           | 1. Obviously this is a product we'd want to build because our
           | customers want it
           | 
           | 2. We contacted Plaid to see if they wanted to be part of it
           | 
           | 3. Plaids pricing didn't work for us so we built it ourselves
           | / went with other providers
           | 
           | Not sure what you'd even get from talking to the team at
           | Plaid that couldn't be learned in an afternoon or two using
           | product that use Plaid and hacking on banking API's.
        
         | msoad wrote:
         | In case tweet disappears:
         | 
         | > 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.
        
           | xtracto wrote:
           | Darn, if this is true.
           | 
           | I'm going to do the low-effort comment and link to a Silicon
           | Valley series video someone posted here not long ago (Brain
           | Rape): https://www.youtube.com/watch?v=JlwwVuSUUfc
        
           | PragmaticPulp wrote:
           | And a rebuttal from Jay Shah (the accused) claiming that this
           | isn't true: https://pbs.twimg.com/media/FR8FjJ9VsAAMY_k?forma
           | t=jpg&name=...
           | 
           | > 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.
        
           | stu2b50 wrote:
           | I'm surprised they had this information so easily at hand.
           | How did they even know that? They saw the tweet and the first
           | thing that comes to mind is to query all the people they've
           | interviewed?
        
             | lambda_lord wrote:
             | It wasn't some IC interviewing for a job, it was a
             | representative of Stripe and Plaid doing a product
             | interview for a possible partnership.
        
               | stu2b50 wrote:
               | Interesting. I'm much less sympathetic, then. I would
               | imagine that kind of situation would be far more formal,
               | with lawyers from both sides present, and, to be frank,
               | this kind of information gathering an expectation. It
               | would be pure naivety for it not to be - these are
               | multibillion dollar companies talking to each other!
               | 
               | On the other hand, if I, a random hypothetical engineer,
               | were interviewing someone for a team, in a 1-1 situation,
               | and they asked about what I worked I'm, I'm naturally
               | going to be less guarded nor really prepared to
               | sufficiently redact my answers.
        
         | sergiomattei wrote:
         | Reminds me of the HN thread full of anon $XB Fintech CEOs
         | bashing Stripe.
        
           | barleyworth wrote:
           | https://news.ycombinator.com/item?id=29388310
        
       | psanford wrote:
       | So could I use this to build a personal tool to track account
       | balances over time?
        
       | ianstormtaylor wrote:
       | If Stripe can leverage their banking relationships to leapfrog
       | Plaid by integrating directly with bank's APIs instead of doing
       | screen scraping... that would be massive! It seems like Plaid's
       | biggest weakness is the flakiness of their connections, which
       | creates so much frustration/churn downstream.
       | 
       | Plaid's other weakness is their opaque, enterprise-style pricing,
       | which is seems like Stripe is doing away with. Hopefully they can
       | bring the price down, because lots of consumer-facing use cases
       | aren't viable due to the high monthly price per connection.
       | 
       | I hope they add support for investment account holdings--it seems
       | like Plaid is the only one that does this well.
       | 
       | --
       | 
       | Edit: digging deeper, it looks like Stripe proxies to Plaid-like
       | "service providers" under the covers--at least for institutions
       | without OAuth flows. [1][2][3] Presumably they'll build in-house
       | connections over time, but it dents my hope that their
       | connectivity will be better than Plaid's. Either way, transparent
       | pricing and more competition in the space is still welcome!
       | 
       | [1]: https://support.stripe.com/questions/what-is-the-
       | relationshi...
       | 
       | [2]: https://support.stripe.com/questions/how-does-stripe-
       | limit-d...
       | 
       | [3]: https://support.stripe.com/questions/who-will-obtain-my-
       | fina...
        
         | tootie wrote:
         | Hasn't Yodlee been doing this way longer than Plaid? They are
         | (or at least were) the backbone for mint.com
        
         | zht wrote:
         | It's unlikely Stripe has access to any APIs that Plaid doesn't
         | also have access to.
        
           | sz429961 wrote:
           | it's also unlikely Stripe doesn't have access to any APIs
           | that Plaid has access to
        
             | zht wrote:
             | sorry what? no one was saying Plaid had access to more APIs
             | than Stripe
        
               | sz429961 wrote:
               | right, which makes it easy to clone the whole set of APIs
        
           | FintechRisen wrote:
           | We've found that Plaid only leverages around 3-4 Direct API
           | connections for some reason, why other aggregators like MX,
           | Finicity, Yodlee all have 10+. It seems suspect to me because
           | Plaid doesn't seem to be prioritizing the protection of user
           | credentials the same way others are.
        
             | lucasmullens wrote:
             | In this thread you've accused the founder of Plaid multiple
             | times of lying, without evidence, and most importantly,
             | your account was made only 1 hour ago.
             | 
             | You've said "Stop lying bro.", "hella sus", "This is 100% a
             | lie", "seems suspect", all without evidence.
             | 
             | You seem to have some ulterior motive here that you haven't
             | disclosed. Maybe you're right about everything, but it
             | comes across poorly.
        
             | fintechguy1234 wrote:
             | This is false. Hundreds of banks have built out api's on
             | plaid exchange: https://plaid.com/plaid-exchange/
        
               | phoenixy1 wrote:
               | Yeah, at this point the majority of API requests that
               | Plaid fulfills are filled with data provisioned from
               | institutions via an API. I assume that OP was only
               | looking at named banks who we did press releases with
               | (e.g. Chase, Wells Fargo, Capital One) but there are many
               | more financial institutions we have API integrations with
               | beyond that, either via Plaid Exchange or via their own
               | APIs. [I work at Plaid]
        
         | gigatexal wrote:
         | If they do this it would indeed be huge. Screen scraping and
         | the like to get around a proper API sucks. In the EU we have
         | PSD2 but the APIs aren't all amazing.
        
           | andy_ppp wrote:
           | Also every 90 days you have to do some weird dance to keep
           | the apps receiving your data, it never seems to work right
           | and you forget. I would think building a business on such
           | flakey APIs is dubious at best!
        
             | dylan604 wrote:
             | To fight that flakey situation of bad APIs, one decides to
             | build a business based on flakey screen scraping instead?
             | With financial information? What could possibly go wrong?
        
             | gigatexal wrote:
             | This is still a ton better than asking the client for
             | credentials and then scraping their logged in bank accounts
             | which is hella creepy.
        
           | jbverschoor wrote:
           | The APIs aren't amazing, and you need to be a financial
           | service provider to access production environment. Aka
           | useless for any startup or person
        
             | gigatexal wrote:
             | Yeah getting a license with bafin is tough but a VC backed
             | fintech can do it or partner or use the api of a fintech
             | that already has a license and build off of that.
        
         | zachperret wrote:
         | 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.
        
           | amonroe369 wrote:
           | You seem pretty clueless about your competitors and you are
           | talking poorly, very openly about them here Zach. That is not
           | a good look in any way and reflective of a poor corporate
           | culture.
           | 
           | If MX and Finicity are aggregators of aggregators, that would
           | still mean Plaid would benefit, right? Maybe you (and your
           | sales team) do not know your competition.
           | 
           | Publicly airing grievances as well against Stripe, who you
           | could potentially partner with in the future, reflects an
           | underlying toxic corporate culture at Plaid. I do not think
           | Stripe will likely ever want to do business with you after
           | this and prevent others from doing the same. I have never
           | worked at Plaid, but I am not inclined to want to work with
           | you based on what we are seeing here. Plaidsettlment.com
        
             | pc86 wrote:
             | Creating a throwaway for this (potentially valid) criticism
             | destroys any credibility you may have.
        
               | amonroe369 wrote:
               | fair criticism. My points remain. Having talked to
               | Plaid's sales team, not bad people. I just don't trust
               | providers that openly talk poorly of competitors and
               | plaids sales team did that and the CEO of the company is
               | doing it in public.
        
               | [deleted]
        
             | theyknowitsxmas wrote:
             | Zach has responded to a Stripe product manager on Twitter.
             | 
             | https://twitter.com/zachperret/status/1521898404061716480
             | 
             | I think Zach knows his product very well & this could be
             | espionage on Stripe's part, but I'm not dissatisfied with
             | Stripe's product nonetheless.
             | 
             | Disclaimer: I've never used Plaid.
        
               | amonroe369 wrote:
               | Plaid and their lawyers should have hashed it out with
               | Stripe then in RFP. I work for a big bank. If we send out
               | RFP's for a project there's language in there that most
               | providers never look at. It basically says "I can do
               | whatever I want with information in the RFP except give
               | it to your company's competitors."
               | 
               | So if I am working for a top 10 bank, and I see value in
               | a solution, if I cannot get it cheaper than it would cost
               | me to develop it and time is not that big of a factor, I
               | build it myself. If there are no time constraints and
               | vendor can deliver solution at roughly the same cost I
               | can build it for, I built it myself.
               | 
               | My guess as not being part of the stripe/plaid
               | conversations or RFP. Zach's lawyers did not redline or
               | challenge language around processes or IP with Stripe in
               | RFP Agreements and that was likely the biggest downfall.
               | 
               | Plaid does have great litigation attorney's, I mean their
               | class action settlement was only $58 million. So likely,
               | Plaid might get something if there is IP that was
               | protected. It will come out in discovery if a lawsuit
               | gets legs.
        
           | lukeramsden wrote:
           | > MX itself is an aggregator of aggregators
           | 
           | Aggregators all the way down...
           | 
           | The US really needs its own PSD2.
        
           | thomaslord wrote:
           | It sounds like the issue noted above is less the actual
           | pricing, and more that it's difficult to find out what the
           | pricing is.
           | 
           | This matches up with my personal experience - I had to get in
           | touch with an actual human and ask them for the pricing just
           | to see if a project would be viable. I did get a relatively
           | fast response that made the pricing very clear, but because
           | it didn't come with any caveats (e.g. volume-based pricing or
           | "we need to negotiate pricing on a per-client basis") it
           | almost made the experience more frustrating.
           | 
           | Basically if your pricing is simple and universal enough that
           | you _could_ post it directly to the pricing page, you
           | _should_ post it to the pricing page. Especially for
           | developer-focused products, hiding the pricing can lead to a
           | serious reduction in conversion.
           | 
           | My use case is transaction data so the pricing for Stripe's
           | competing product isn't posted yet, but if I was choosing
           | between the two products and only one had pricing clearly
           | posted on the website I'd immediately go with that one unless
           | the pricing was so ridiculous that it wasn't affordable. And
           | if the pricing was ridiculous, I'd probably assume that
           | Plaid's pricing was just as bad.
           | 
           | Basically, I should be able to evaluate your product and its
           | pricing without engaging with any of your employees wherever
           | possible. I routinely remove companies from consideration
           | because I can't plug them into a spreadsheet of prices
           | without going back and forth with a sales team whose time
           | I'll just be wasting anyway.
        
           | emrekzd wrote:
           | Unlike Plaid, Finicity and Yodlee have direct integrations
           | with some banks. Example: Silicon Valley Bank has direct
           | integration with Finicity. SVB through Plaid breaks quickly
           | (because they require some weird 2fa policy).
           | 
           | Let me know if I'm missing something but if Stripe is A)
           | providing reliable connection to common banks Plaid misses
           | and B) saving it's users from all the headaches of
           | integrating with old school services like Finicity/Yodlee,
           | then charging a premium sounds like fair game.
        
             | phoenixy1 wrote:
             | Plaid has direct integrations with many banks too --
             | Silicon Valley Bank is actually a Plaid partner for ACH
             | processing (see https://www.svb.com/news/company-
             | news/silicon-valley-bank-an...). Not sure when your bad
             | experience with 2fa was but Plaid's connection to SVB has
             | improved over the past ~6 months as we've begun to work
             | together more closely and should continue to do so. [I work
             | at Plaid]
        
               | tjm5081 wrote:
               | Hate to argue, but I agree that Plaid's connection to SVB
               | is indeed unusuable. I've been trying to use them for
               | over a year and we ended up dropping SVB just this month.
               | Chase is on OAuth and WAY better if you need TXN data.
               | 
               | A partnership for ACH is more related to importing stable
               | routing and account numbers, then enabling initiating ACH
               | transfers. Scraping transaction data is a completely
               | different integration that seems to have been forgotten.
               | 
               | Sadly, I'd even wager SVB-Plaid data won't improve any
               | time soon. Remember that SVB doesn't even yet allow
               | external bank transfers on their own bank portal.
        
           | [deleted]
        
           | sicromoft wrote:
           | Plaid doesn't have publicly listed pricing at all. Might as
           | well be infinite.
           | 
           | If a startup can use Stripe, who they're already integrating
           | with, or integrate with a new provider with hidden pricing
           | that requires them to contact a sales person, I wonder who
           | they're going to choose. Good luck.
        
           | ianstormtaylor wrote:
           | Thanks for the reply! I came to that same conclusion about
           | their use of "service providers" after reading through their
           | support docs (and added an edit above), definitely a bummer.
        
             | zachperret wrote:
             | We all wish more banks had API's! Our team is actively
             | working with many more banks to launch them soon, but alas
             | -- legacy infrastructure is slow to move!
        
           | FintechRisen wrote:
           | I'm very familiar with both Finicity and MX. I know that MX
           | isn't an aggregator of aggregators. Stop lying bro. Tell
           | people about how you abuse credentials and take some
           | responsibility rather than trying to constantly pass the buck
           | and blame others.
        
             | dang wrote:
             | Hey - can you please make your substantive points without
             | personal attacks or swipes? We ban accounts that do those
             | things--especially new accounts showing up to fight shit
             | out like this. Not cool, no matter how right you are or
             | feel you are.
             | 
             | Also, it's not in your interest to post like this to HN
             | anyhow. The audience will only side against you if you
             | fulminate and call names. If you want to win readers over,
             | you should drop all that and instead provide specific,
             | concrete information and say what's important about it.
             | 
             | (Before anyone misinterprets the above: I have no idea
             | which side you're on. I haven't looked at any of the
             | comments you've replied to. All I know is that, whichever
             | side you're arguing for, you're going about it in the wrong
             | way for HN. If you'd please review
             | https://news.ycombinator.com/newsguidelines.html and fix
             | that, we'd appreciate it.)
        
           | [deleted]
        
           | edwinwee wrote:
           | 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.
        
             | healthbjk wrote:
             | Your documentation says you use service providers,
             | specifically MX and Finicity. Is that correct or are you
             | integrating directly (or some mixture)?
        
             | bspear wrote:
             | Gotta love this spicy thread
        
             | iknowstuff wrote:
             | Which banks have OAuth APIs? I would love to switch to one
             | of those instead of exposing my password due to my bank's
             | incompetence.
        
               | thekyle wrote:
               | I know that Charles Schwab has some sort of OAuth flow
               | which I used when connecting my account to TurboTax this
               | year.
        
               | lbotos wrote:
               | So, I got very excited about this, but it seems that
               | banks are expecting "bank integrator" aka companies, and
               | not giving access to end users :( If any knows of a bank
               | that has API access in the US do share!
        
               | vineyardmike wrote:
               | You might find luck using companies targeting algo
               | trading. A lot of companies allow use of the account more
               | like a checking account (eg interactive brokers). They
               | have an API and also allow different logins to have
               | different authorizations.
        
               | [deleted]
        
               | withinboredom wrote:
               | I use Bunq here in the NL. I wish all banks would steal
               | their APIs. The abilities I have as a dev are simply
               | amazing.
               | 
               | https://doc.bunq.com/
        
               | Tijdreiziger wrote:
               | Bunq seems like a... suboptimal bank, though. They cost
               | ~5x more than other NL banks, and by all accounts, their
               | customer support is streets behind.
               | 
               | Their API and app-centric approach seem to be the only
               | upshots, and even then, other banks have relatively good
               | apps these days.
        
               | conroy wrote:
               | WellsFargo has some form of OAuth
               | (https://developer.wellsfargo.com/). I know that YNAB
               | (https://www.youneedabudget.com/) uses it.
        
               | CincinnatiMan wrote:
               | Capital One
        
               | fjni wrote:
               | they deserve a lot of credit for how early they built
               | this and made it relatively broadly available!
        
               | FintechRisen wrote:
               | MX and Finicity both have OAuths to like 80+% of the top
               | 20 financial institutions. There's a reason Plaid doesn't
               | want people switching to them and it's hella sus
        
               | conradev wrote:
               | I believe Plaid was the one who got JPMorgan to build an
               | OAuth API in the first place: https://finovate.com/plaid-
               | signs-open-banking-agreement-with...
               | 
               | Why can't the reason be "losing their only source of
               | revenue to a competitor"? That seems like a fine reason
               | to not want people to switch
        
               | amonroe369 wrote:
               | Edit: cannot assure, but rumor on the street from peers,
               | they were not the ones to get Chase to build OAuth.
               | 
               | PR is a hell of a marketing tactic.
        
               | [deleted]
        
               | judge2020 wrote:
               | Plaid used oauth for Bank of America circa 2019 when I
               | tried, and currently uses Capital One's oauth when I try
               | to log into it. I'm sure they use it when it's
               | convenience (or maybe when the financial institution
               | mandates it).
        
               | jackson1442 wrote:
               | chase has an OAuth flow but not every integration uses
               | it.
        
           | matdehaast wrote:
           | @zach this is what I find very frustrating about the current
           | players. We recently got pricing from you and obviously being
           | under NDA won't share the figures but I'm not seeing the
           | discount you quote above compared to stripe.
           | 
           | Further there are significant platform minimums and platform
           | fees that add large costs initially.
           | 
           | How do you reconcile the above comments from our interaction?
        
           | xtracto wrote:
           | > That said, if anyone does have feedback on where Plaid
           | pricing is prohibiting new use cases,
           | 
           | I remember in a previous company we migrated out of Plaid
           | into SynapseFI because Plaid started charging a high price on
           | a _per connection request_ service (like, requesting a new
           | bank connection for a new customer was quite expensive).
           | 
           | It seemed Plaid was focusing on the Mint like use cases: low
           | number of users, allowing them to setup a Plaid connection
           | one time to be used extensively subsequently. While our use
           | case was more akin to: lots of users/authentications doing
           | one time connections that may not be reused. (kind of what
           | might be used for credit risk analysis, although the company
           | was not doing that).
        
         | kareemsabri wrote:
         | Pretty sure Plaid already has integrated directly with bank's
         | APIs and has been moving away from screen scraping for years.
         | 
         | Plaid's flakiness / reliance on screen scraping is probably
         | that a lot of these banks don't expose APIs / OAuth etc.
        
           | zachperret wrote:
           | Indeed! Plaid is integrated with ~every bank that has an API,
           | and in many cases we've actually helped the banks build API's
           | themselves.
        
             | fossuser wrote:
             | Do you know why Fidelity Investments plaid connection
             | doesn't work most of the time?
             | 
             | It's something I hit often and have to do the old
             | microdeposit thing (if I can even figure out how to trick
             | the service into allowing me to do that at all).
             | 
             | Does fidelity just have some sort of broken setup?
        
               | aarohmankad wrote:
               | Not sure when you were testing, but we do call out some
               | instability on the Fidelity Institution Status page in
               | the Developer Dashboard.
               | 
               | > To maintain system stability, Fidelity currently limits
               | access during high-volume windows. As a result, please
               | expect unavailability between 9-10:30am and 3-4:30pm ET.
               | We recommend end users link Fidelity accounts between 5pm
               | - 9am ET.
        
               | zachperret wrote:
               | Great question. I do not know off the top of my head, but
               | can look into it.
        
               | ethbr0 wrote:
               | This is a huge annoyance with integrations for me.
               | 
               | The host knows when they break. Or if they don't, they
               | should, via automated tests.
               | 
               | Tell me "It's down." Not some bullshit about experiencing
               | temporary difficulties.
        
             | FintechRisen wrote:
        
       | g-unit33 wrote:
       | Do banks not sue these companies for scraping?
        
         | wmf wrote:
         | No, because banks don't care about security.
        
           | g-unit33 wrote:
        
       | oyashius wrote:
       | Finicity has a subpar UX compared to Plaid, especially
       | considering reliability of the connections. Unless Stripe builds
       | its own screen scraping, this imo is a worse product.
        
       | [deleted]
        
       | transportgo wrote:
       | The currency and account names used in the demo seems to be
       | localized. I get kr and olanordman (johndoe in the US?) on my
       | Norwegian IP device
       | 
       | If it gets peoples attention like it did mine maybe it's worth
       | the dev time to implement?
        
         | dylan604 wrote:
         | demo names as a service. you send your locale, we send you the
         | localized john/jane doe names and other info like 123 Main St
         | and 555-1212 type data.
        
         | zerocrates wrote:
         | Jane Diaz is the name in the US actually.
        
       | mooreds wrote:
       | Plaid gets its market validated!
        
       | theyknowitsxmas wrote:
       | Only available in the US.
        
       | willswire wrote:
       | Glad to see a Stripe alternative to Plaid.
        
       | jiripospisil wrote:
       | Let me just say Stripe's design team is doing an absolutely
       | amazing job.
        
         | rvz wrote:
         | Someone has been studying a great business leader on a
         | strategic level (as well as a design level).
         | Stripe: 'We have always been shameless about stealing great
         | ideas'
        
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