Plaid accuses Stripe of foul play in new open banking product launch
The launch of Financial Connections was met with protestations by Plaid that its data had been used unfairly.
It was a rocky start to payments fintech Stripe’s foray into open banking today.
The launch of its new product Financial Connections prompted aPlaid, Zachary Perret, who accused Stripe of underhand data acquisition tactics.
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)
Stripe Financial Connections allows users to share financial data and connect directly to customers’ bank accounts to enable streamlining, fraud prevention and risk management of payments activities.
Boasting the usual open banking benefits, the platform promises easy integration, security and rapid conversion and connection transaction capabilities.
Stripe’s new capabilities pitch it in direct competition with former partner and open banking giant Plaid, who is now alleging that Stripe used their relationship to obtain important information on how to develop the open banking product.
Giving further fuel to the controversy, Stripe chose to integrate Plaid’s competitors MX and Finicity as aggregators to build the product, despite having gone through an in-depth RFP process with Plaid.
Stripe product manager Jay Shah was
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)
A Stripe spokesperson told AltFi that they could comment no further than what was said in Shah’s tweet, which constituted a “firm rebuttal” of the allegations. They also said that Financial Connections differentiates itself from Plaid's product on account of how seamlessly it integrates with Stripe’s other services.
While Perret did not respond to our questioning, he engaged defensively with comments on Hacker News around the Plaid and Stripe products, including allegations that Plaid’s pricing is high and “opaque”, saying:
“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!”
Others on the thread disputed Plaid’s claim on pricing, with one rebuffing:
“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.”
*Article amended on 5th May 2022 at 4:48pm following confirmation from Stripe that it is still in partnership with Plaid.