April 26, 2017
Creating a faster and more secure bank payment experience
SAN FRANCISCO, April 25, 2017 – Today, Plaid and Dwolla announced a new partnership to offer a fully tokenized ACH payment integration. The partnership makes it possible to tokenize account and routing numbers and authenticate user bank accounts through Plaid and start accepting Automated Clearing House (ACH) payments in minutes with Dwolla’s ACH API.
Plaid, the technology company whose suite of APIs powers many of the most innovative and fastest-growing companies in financial services, serves as the authentication gateway and data provider while Dwolla, a SaaS platform that moves billions of dollars for developers and businesses of all sizes, is the ACH provider and facilitates the movement of funds via its Access API. The new partnership tokenizes the sensitive financial information from transactions to significantly limit exposure of the data.
We’re at an inflection point in the world of ACH payments, said Zach Perret, CEO and co-founder of Plaid. This partnership brings Dwolla and Plaid together to simplify the developer experience, increase data availability for easier approvals, and increase security for consumers via account number tokenization. The strength of security in card networks is based on tokenization being table stakes, which we hope becomes more common throughout the industry, and we’re working to make a reality with partnerships like this one.
Dwolla has specialized in making bank transfers more accessible and secure for years. During that time, Plaid focused on innovating in the bank authentication and consumer data space, said Ben Milne, CEO of Dwolla. The partnership demonstrates how FinTech companies can come together to introduce easier and safer ways to access the nation’s banking infrastructure.
The ACH network moves more than $41 trillion each year. To send funds to another bank account, businesses and consumers must authenticate the account. This requires the account owner to provide sensitive bank information to a third-party and validate via micro-deposits, which can take several days to verify, or via an instant account authentication by companies like Plaid. Passing and storing this bank transfer information between third-party platforms and their end users has been traditionally facilitated through best practices by providers like Dwolla and Plaid; however, this new collaboration tokenizes this authentication and transaction data, removing the need for third-party platforms to capture any sensitive banking data from their consumers.
"Tokenizing this data is a huge win for consumers and a boon for companies looking to reduce their information security risk," said Adam Dell, CEO of Clarity Money, a joint customer of Dwolla and Plaid. "Not only does this collaboration between Dwolla and Plaid make it easier and safer for new entrants, like Clarity Money, to get products to market, it underscores the net new value, best practices, and conversations being generated by FinTechs in the space.
Since its founding in 2012, Plaid has set out to enable innovation throughout financial services. Plaid’s technology infrastructure allows innovators to create new products and services that connect with consumer’s bank accounts and improve their financial flexibility. Applications powered by Plaid benefit tens of millions of consumers.
Plaid is a technology platform that enables applications to connect with users’ bank accounts. We focus on lowering the barriers to entry in financial services by making it easier and safer to use financial data. We build beautiful consumer experiences, user-friendly infrastructure, and intelligence tools that give everyone the ability to develop the future of financial services. Learn more at www.plaid.com.
Dwolla’s products and services power billions in commerce annually for businesses of all shapes and sizes. Its flagship platform, Access API, helps developers connect to the nation’s banking infrastructure to build robust and seamless experiences for their users. Its non-technical product, Transfers, offers a suite of turnkey solutions that make it easy for businesses to authorize their bank account and start accepting or sending money—no coding required. The company launched nationally in 2010 and has been recognized as one of the most innovative companies by MIT Technology Review and Fast Company. Learn more at https://www.dwolla.com.