It just got easier for popular finance apps to link to digital banks, instead of traditional ones.
Start-up Plaid, recently valued at $2.7 billion, already connects bank accounts to fintech apps like Venmo, Robinhood, Coinbase and Acorns. It announced “Plaid Direct” on Wednesday, which lets users more easily connect to newer digital banks like Chime.
Before the new, back-end product known as an API, users couldn’t pay a friend through Venmo for a restaurant bill with money they had in a start-up bank. That Venmo account could only be funded through a traditional financial institution. This lets fintech apps go directly to each other.
“You should be able to interact with your money and your data in PayPal just like you could with a credit union or a bank — this allows that to happen much faster,” Baker Shogry, head of product at Plaid, told CNBC in a phone interview. “It really just helps make the entire thing work together more seamlessly.”
Shogry said this does not bypass, or change anything from a regulatory perspective.
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