People who use online banking platforms want their finances and account information to be safe. That’s why Plaid made it its mission to protect user data and secure financial transactions. But does PayPal use Plaid? Because it’s not a classic banking service, this is the question many people ask.
Yes, PayPal does use Plaid as a payment processing partner. When you sign up for PayPal, you’ll be asked to provide your bank account, debit card, or credit card information. Plaid is used to verify your bank account info and process payments.
Here, you’ll learn everything about Plaid and how to connect it with your PayPal profile.
Does PayPal Use Plaid?
In short, yes. PayPal uses Plaid as an intermediary software that processes payments and securely shares your personal information with financial institutions that require them.
Generally, PP is a reliable and safe way to send and receive money online. It’s been around for more than 20 years and is used by millions; there have never been major issues with the platform or its security.
Yet, it never hurts to be careful with security, so you can merge Plaid with your PP account and let the processor company take care of the transactions for you. You can allow it to see your transaction and other info, making your online banking a little more secure.
How to Open a PayPal Account and Pay With It
To open a PP account and start making payments, go to the official website and, from the home page, click on the “Sign Up” button. You will be asked to provide some personal information, including your name, email address, and password.
Once you have created an account, you can add a payment method to your profile. PP offers a variety of payment options, including credit and debit cards (such as Apple cards,) bank accounts, and PayPal Credit. You can also choose to pay with a mobile device via the official app. Learn which bank accounts are the best to connect to PP.
After you have added a payment method, you can start using PP to pay stuff. To make a payment, log into your PP and click on the “Send & Request” tab. Enter the email address or phone number of the person you are sending money to and the amount. You may be limited in how much you can send.
Then, click on the “Send” button. The recipient will receive an email or text notification informing them that they have received a payment. Sometimes, your transaction will be pending.
What Is Plaid, and How Does It Work?
Plaid is a service that allows users to connect their bank accounts to third-party apps and prevents financial sites from accessing all their banking and personal data.
It’s a San Francisco-based fintech startup company and boasts of building over 6,000 digital services. They call their mission “democratizing financial services through technology.”
Besides its crucial role of being a secure third-party company that keeps user information safe, it also allows for tracking spending and income more efficiently and receiving notifications when there are changes in the users’ balances and cards. Anyone can access their data and pay without logging into multiple apps.
When you set up Plaid to authenticate your bank info, you can accept and authorize it to transfer specific financial information. That can be your balance, transaction history, and other data.
Plaid’s site claims it uses the highest encryption protocols, including Advanced Encryption Standard (AES 256) and Transport Layer Security (TLS), multi-factor authentication, and a bug bounty program that increases security at Plaid itself. It also promises users have total control of their data.
Is It Safe for Customers to Use Plaid?
Yes, Plaid is safe to use. Despite settling a large dispute with Robinhood, Coinbase, and Venmo last year, it claims a strong commitment to security and privacy. They were sued for gathering more data than needed and storing the users’ bank account login info in their systems.
They agreed in the settlement that they would change these questionable business practices and others and have gathered more financial partners over the last several months.
The platform is currently used by thousands of businesses of all sizes, from startups to Fortune 500 companies. Some companies that work with Plaid include:
- American Express,
- Chase,
- Capital One,
- Stripe,
- Acorns,
- Betterment.
How Can I Connect My PayPal Account and Plaid?
In order to connect your PP account with Plaid, you will first need to create an account there. You can do this by going to the Plaid website and clicking on the “Sign Up” button. Once you’ve done that, you need to link that profile to the one on PP. To do this, log in and go to the “Linked Accounts” section.
From there, click on the “Add a New Account” button and select “Plaid” from the list of options. Once you have done that, you can utilize the website or Plaid app to access your PP info and use your cards without fear.
To recap the steps, here’s what to do:
- Create a new Plaid account by clicking on the “Sign Up” button,
- Log into PP,
- Go to the “Linked Accounts” section,
- Click on the “Add a New Account” button,
- Select “Plaid” from the list.
Create a PP Account, and Connect Your Bank and Plaid to It
You can safely create an account on Plaid and connect it to your PP profile. It’s a great way to increase security on your online banking platform and ensure none of your personal and transactional info leaks.
Plaid has introduced quite an innovation in fintech business practices and proven to many banks and companies that work with it just how great their system is. If so many financial institutions trust this modest fintech company, you can do so, too.
