Plaid Launches in the UK

1) Regulation. What you heard as "PSD2" - is essentially a directive by European Commission and EBA demanding banks to open up access to accounts data and payment initiation. Neither it defines by what means this access should be provided, nor when it should be available - each European country Central Bank can decide on its own.

2) Technical Specification. Examples are OpenBanking UK specification or The Berlin Group - would be groups of banks or local regulators trying to define common standards. Think of interface definition that describes both APIs as well as journeys/workflows.

3) Compliance. In the EU some of the banks (mostly large ones) are now required to be PSD2 compliant, which means they would need to expose their APIs through the standards described above. In the US, where there is no such requirement - the only way to access the bank account is to emulate a browser.

4) Third-Party Providers or Aggregators (Plaid, Teller, Tink, SaltEdge, Bud...) - would essentially provide access to the accounts of multiple banks via APIs. If you look at Plaid in the US - their codebase is probably 50%+ screenscraping/user emulation scripts in order to retrieve your accounts from e.g. Bank of America. For the EU fin-techs its a bit better, but still depends per country (remember Berlin Group vs UK OpenBanking?).

[1] https://github.com/plaid/link/issues/68

The typography on the docs page is excellent: https://plaid.com/docs/quickstart/

And also what the biggest pain points are to building fintechs in other markets.

Pretty happy with Truelayer (https://truelayer.com) but more competition is always better.

These APIs use an authorisation flow similar to what you see when you 'Login with Google' or 'Login with Facebook'. At some point in that flow, you are redirected to your bank's web site to allow access, and to select the account(s) for which you are allowing access. At this point, you are on your bank's web site, you can check the URL to make sure you're not being phished.

On the face of it, it seems like any company that's building on top of bank transaction data should just register as an AISP themselves, as the integration with Open Banking APIs doesn't look that complicated. But Plaid is one of a number of third parties that insert themselves in between.

In general these services suggest some combination of (i) easier integration, i.e. less development and maintenance, (ii) additional intelligence on top of the raw data, e.g. categorisation of transactions, (iii) no need for maintenance.

There's one obvious con: the AISP's logo has to be shown in the authorisation flow. So, even if your users know you, they might not be willing to share their information with 'Plaid' or whichever third party AISP you've chosen.

I don't know how real the development/maintenance/integration issues are. I could imagine that registering with 30+ banks and testing your code against all of them might be a hassle. But if their API backends all behave in the same way, then maybe you just need configuration parameters for the endpoint and token(s). If their backends have slightly different behaviour, though, then perhaps you need to branch your code based on the bank.

One thing that's encouraging about Plaid entering this space: their free tier appears to support up to 100 bank accounts for free. This should be enough for anyone who wants to set up their own self-hosted Mint equivalent. And, if all the accounts are in the UK, then you're giving Plaid just read-only access to your accounts, which is much less of an issue than providing your login credentials to them or another party.

In case you're curious to see which other companies have registered as AISPs or PSPs (payment service providers), the full list of third party providers is available here: https://www.openbanking.org.uk/provider-categories/third-par...