How to Accept Payments With Plaid
Are you looking for a secure, reliable, and easy-to-use platform that your customers can use to pay with their bank account?
Plaid exists to solve that problem.
Plaid is a financial technology company that provides a platform for connecting bank accounts to third-party applications. While Plaid does not process payments directly, it can be used to authenticate and verify bank accounts, which can then be used to initiate payments through other payment providers.
To accept payments using Plaid, you would need to integrate with a payment provider, like Paynote, that supports Plaid.
For your peace of mind and the safety of your business and customers, Plaid uses best-in-class encryption protocols to protect financial information and prevent fraud.
In this blog, we’ll discuss everything you need to know about what Plaid is and how it can help you send and receive electronic payments safely and securely.
Plaid 101: How Plaid Works
Plaid connects to a bank or financial institution to verify bank credentials and create a connection between the financial institution and a financial app.
What most people don’t know, though, is that Plaid does not move money.
Instead, Plaid partners with about 11,000 banks, which allows merchants to use Plaid to connect and verify client bank accounts and receive verified ACH payments. During a financial transaction, Plaid encrypts the information coming from banks to keep sensitive login and financial information secure and private.
While Plaid verifies the account, merchants need to find an ACH processor, like Paynote, to actually facilitate the transaction. More on this in the next section.
How to Accept Payments With Plaid
As we mentioned, Plaid doesn’t actually move money, so you can’t accept payments with Plaid alone.
Instead, you need to use a financial or payment processing app, like Paynote.
Paynote uses Plaid to verify and facilitate financial transactions, making them more secure for clients and businesses.
Here are the general steps to accept payments with Plaid:
- Integrate with a payment provider that supports Plaid, such as Paynote.
- Use Plaid's authentication and verification tools to securely connect to the customer's bank account.
- Initiate a payment using the payment provider's API, using the verified bank account information as the funding source.
We’ve found that this feature is a huge deal for merchants in high-risk and hard-to-place industries since it reduces fraud, chargebacks, returns, and other payment bottlenecks that can cause headaches for you and your customers.
How do I Know Plaid is Safe to Use?
Plaid takes safety and security seriously, and it’s backed by some of the best encryption in the industry.
Here’s a quick breakdown of the kind of protection you’ll get when you use Plaid:
- Intensive encryption standards like the Advanced Encryption Standard (AES 256) and Transport Layer Security (TLS).
- Multi-Factor authentication (MFA), which secures financial information even for customers with financial institutions that do not offer it.
- Allows clients complete control over which companies can access data and what kind of information is shared with each company.
Part of what makes Plaid so safe is that the service prevents other sites from accessing financial data, like banking and login information.
Instead, Plaid users only share a small amount of information, which Plaid encrypts and keeps private.
However, the platform does not share bank or credit card numbers or login credentials, making electronic funds transfers much more secure.
Plaid can Make Accepting Electronic Payments Easier
If you’re looking for a way to streamline and secure your electronic payment processing, invest in a platform like Paynote, which uses Plaid to verify and secure financial transactions.
This makes credit and debit card payments more secure for your clients and your company.
Ideal for merchants in high-volume and high-risk industries, Paynote is a great way to provide an extra layer of protection for customers.