Stripe responds to the Financial Connections/Plaid kerfuffle
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Example: Remember the Stripe Corporate Card? It was "launched" as invite-only 3 years ago and is still invite only today, with little signs of traction. Meanwhile both Brex and Ramp have become decacorns through crazy revenue growth.
It's not really just a Stripe thing either. I think people are way under-estimating how hard it is for a large company to launch and succeed with a product outside of their core offering, especially when the competition is a small nimble startup with a singlular focus on that one product.
Startups die all the time, for all sorts of reasons, but "large company started competing with it" is a rather rare one.
IME, Plaid is lightyears ahead in terms of reliability and overall developer and end-user experience.
I regret handing over my bank login details to Plaid, since they scraped my bank statements without stating so upfront and offered that information to 3rd parties (indirectly, as a score of some sort, IIRC, but that's scraping very personal information).
When I mentioned it on HN a year or 2 ago, someone who works there denied the practice - might have been a cofounder. A few months ago I was contacted regarding a settlement for a Plaid class action suit regarding the very actions that had been denied on HN. Plaid - never again.
I will never sign up for a service that requires Plaid.
And how do Plaid bypass your bank's per-login 2FA if they're logging in as is they were a user?
Plaid just relays the 2FA question.
I think websites would have a tough time preventing users from sharing username/password. It would certainly be acceptable in a power of attorney situation.
Plaid is pretty clear in their privacy policy that they DO NOT repackage and resell data (they do sell data - as in, when you use Plaid to give your banking info to a mortgage broker, the broker is paying Plaid for your data, but it is at your explicit request).
If banks didn't want Plaid to do screen scraping, they could build APIs. Some are now. But they've been VERY VERY reluctant to do so, because they want to hold customers (us!) hostage to their services and make it painful to go anywhere else to get financial services. I appreciate that Plaid figured out how to break their stranglehold, which has directly enabled the current blossoming of FinTech apps ... even if they had to do so in a way I don't love.
Even if we take this as a given - what if customers don't want Plaid to scrape their data? I only used Plaid to verify that I own the bank account - but they went out of their way to scrape my transaction information, just because they could, and that data is valuable - that is messed up. I'm sure if my bank had an API, Plaid would still have hoovered up my transaction information, so the "API access vs Scraping" debate is a sideshow.
If they hadn't scraped my transaction information, I wouldn't have been part of the class, but they chose to maximize data collection. If it had been Facebook or Google that harvested financial info the way Plaid did, no one would be saying "Their TOS is clear about it". Additionally, any big tech company can purchase Plaid and get that data (I can't remember if the settlement has a provision for deletion of that data).
Small projects as you might imagine are measured in years, not days or months.
An API like you describe could take half a decade to build, at the cost of hundreds of millions of dollars. These are not fake numbers or estimates. This is what it would cost.
When you think big finance, think government.
Do you also believe that Bill O'Reilly and Fox News paid out $30m+ even though he didn't do anything? After all, they admitted no wrong doing in the settlements.
https://news.ycombinator.com/item?id=27467797#27476452
Me: Always been curious - do you (Plaid) use the transaction data or any other data obtained from customers logins for anything other than the reason the customer supply’s their credentials? I.e if I use plaid to link to my Robin Hood account, do you in any way sell/share/use my data apart from allowing me to fund my Robin Hood account?
Response: Good question! No, we don't. Our official statement on this is at https://plaid.com/how-we-handle-data/ "Plaid only shares your data with your consent. We don’t share your personal information without your permission, and we don’t sell or rent it to outside companies."
They say “personal information”. That is consumer-facing language for something which in banking has a legally (regulation) defined term: “PII” or personally identifiable information:
https://www.investopedia.com/terms/p/personally-identifiable...
It can be argued that lists of money spent at stores cannot be reversed back to a person without other information. So they might not consider your transactions PII.
As for the consent, the TOS click wrap generally gets your consent, in the part where firms mumble about “our partners” for “legitimate uses” or etc. while bucketing various data brokers in that class.
I don't know. Maybe their competitors are even worse? But as an end-user Plaid's experience is far from good.
In their current state I really don't have much control after I gave them my banking credentials. If they can actually implement an OAuth model for their paying customers (e.g. third parties using their API) to integrate, that would be much better. For example when I try some service first I can initially only give it access to one of my least important account, evaluate whether it's useful, before giving it more of my accounts, or revoke it access to all my accounts. I have none of those controls today.
I actually also interviewed with them several years ago, and mentioned the OAuth thing during my interview. But after all these years it's still not there. If I have to _guess_ why, I would guess they fear such a feature will make their paying customers (API users) less likely to use their product, e.g. their business model actually relies on the end users' lack of control.
That was at peak bubble. Given that most public Fintech companies crashed around 70% from ATH I assume the same holds for Brex and Ramp.
(The things you can do to/with a language ... "Verbing weirds language" takes the cake, though.)
I wonder if this opens up a Visa acquisition?
The fact that no one has mentioned Yodlee once makes me think very few people in this thread actually know this market.
Not to mention there are probably quite literally thousands of Stripe competitors.
The world is a big place and the SV bubblethink of "only one person wins" is highly myopic.
Plaid will be fine. They just might not be $10B valuation fine. That's all.
EDIT: Doh, saw Yodlee mentioned once much lower in thread now.
People likely aren’t familiar with yodlee and maybe it’s an indication they’re not aware of the space. But for those who are - I’d not have mentioned it either, they barely touch plaid on many facets.
Edit: I know in one particular instance we “considered” yodlee at what is now considered a big consumer banking unicorn. But in no way was actually considered. It was used as a negotiation tool.
According to a few google searches, this is simply not true:
Yodlee supports 14k banks and Plaid supports 11k banks
I personally have used Kubera as a consumer who use both Plaid and Yodlee to connect to banks. I have ~3 bank accounts (that represent great candidates for long tail) that simply do not work with EITHER service provider. Having spoken to the support staff from Kubera (who are great btw) they prefer to use Plaid for some of the reasons you mention, but not because its all encompassing.
Categorizing Yodlee as "they barely touch plaid" is simply disingenuous. Much of the functionality is comparable, it's just MUCH better on Plaid for both the developer and the consumer in terms of overall experience.
Currently rare, but as with other aspects of the market for startups, it is irregularly cyclical. Not too long ago Google accidentally killed startups every so often when they launched a product or service (the examples that particularly stick in my mind are Kiko - killed by the launch of Google Calendar in 2006, and Autumn AI, killed by Tensorflow around 2016). Go back to the pre-www days and Microsoft killed startups regularly, seemingly as a competitive sport. A reasonably entertaining account of one such is Startup: A Silicon Valley Adventure, by Jerry Kaplan, founder of Go Corporation:
https://books.google.com/books/about/Startup.html?id=UK7qDwA...
Plaid has enjoyed years of life without much direct competition. My hunch is that few other businesses were interested in the space because it feels inherently fragile, and Plaid has had the benefit from having spent years doing a lot of sausage making.
The inevitable dynamics of competition are finally catching up to them. In established corners of SaaS a vendor with a unique idea barely gets 6 months before their competitors have replicated anything that shows signs of product market fit. Not saying it doesn’t sting, but that’s reality.
The core team was A+ and very reasonable, but the non-core folks would regularly lie and misrepresent themselves. I have to be careful about examples because I don't want blowback to my colleagues, but here's one: telling a third party that they should not do a hybrid Stripe + my_old_company solution because our product couldn't support the use case. But, of course, we had the exact product requested in market then, and the team in question knew that. It's fine to want to close a deal, and I guess some people lie to close a deal. But saying one thing to me and another thing to the world has happened many times with Stripe.
I don't know anything about this particular case, but it does match a pattern that I have seen firsthand.
To be clear, are you complaining about salesmen at a competitor lying to close a sale? Are you also unhappy about water being wet, or bears shitting in the woods?
We were partnering with Stripe on a deal that we originated. They verbally agreed to terms. They then lied about our abilities. So we cut Stripe out, got the deal, and moved on.
The point isn't that competition exists; the point is that Stripe will say one thing and do another. If this is how you live your life, fine, but many people would like to know that Stripe has a history of bad behavior.
So... a sale? The Stripe staff you were working with were from the sales department?
https://news.ycombinator.com/item?id=29387264 (672 comments; 20211130)
> Stripe, and especially the founders, have a quite a poor reputation for screwing over people in and around their orbit.
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Follow-up discussion of the initial announcement: Stripe releases Plaid-like project, Plaid CEO objects to process
https://news.ycombinator.com/item?id=31263288 (15 comments; 2 days ago)
> Unless I'm mistaken, Stripe has a history of behaving this way.
--
Initial announcement discussion -- Plaid CEO's comments:
"Interview" turns out to be a job interview before Jay even joined Stripe back in 2014. Jay started working on this product in 2019.
"RFP" turns out to be a regular RFP where Stripe wants to integrate with multiple partners like MX and finicity.
In the past few years, Plaid CEO and Plaid requested meetings with Jay. Jay never initiated those meetings.
Now Plaid CEO has deleted the tweet and acted like Stripe Mafia has got to him. LOL
Plaid CEO has very low ethics, it seems.
A thousand times no. Companies privately discussing launches with each other to avoid stepping on each other's toes is bad for the consumer. In addition, it may actually cross the line into illegal market allocation.
I am glad that Stripe developed and released a product that they thought would benefit their consumers.
I do not want companies feeling they have to consult another company before entering a market. (which once again may actually be illegal).
EDIT:
Maybe I am being paranoid, but the tone of the Plaid founder and the apologetic nature of this post, kind of brought back memories of Steve Job's indignant emails about other companies hiring, and their apologetic response which ended up leading to an illegal agreement not to hire each other's workers. I don't want any "gentlemen's agreement" about market allocation and collusion about what products/services will be released.
As an aside, I’m excited to switch to Stripe’s transactions API from Plaid for MoneyHabitsHQ.com.
Plaid’s security review process is “submit questionnaire and wait an unspecified amount of time.”
I’m at five weeks of waiting and three help tickets and it’s been absolute silence.
The reason they need login info is because thats the only way to get data, and a huge security risk for everyone (users, bank, and the service). Nobody is required to build an API for your financial business so it can work, and building such an api is not a small challenge in highly secure areas of business.
Personally I won't use any service like this that asks me to break my bank's TOS and hand over login information. That's honestly crazy. I'd rather build my own spreadsheets and dashboards.
I would be OK with Plaid if they let you manage what you share with apps via permission management.
For example: If fintech app wants to make sure I have $500 to send to my friend, I should be able to tell Plaid NOT to share my entire transaction history and it should simply give said app a binary "sufficient/insufficient" balance. No institution should get to look through my transaction history without having a damn good reason. No, I won't give companies the benefit of the doubt in our "ask for forgiveness not permission" tech culture. Assume that any information gathered about you will be monetized or used against you.
For Plaid you've spent your life building this business. Presumably there are many happy customers and you're working really hard to define the space and provide service. One morning you flip on your laptop and see a headline that one of your customers (and competitors) launched a new service that directly competes with yours.
As the founder of "attacked" company not only do you see the competition coming from a customer but from another "friendly" company in your space. Yesterday you were friends, today you're enemies. Doesn't matter who you are, this comes as a shock and it stings.
Worse still, when you show up on HN, a space that in the past might have championed your service, you are now met with comments about how your customers are excited to switch.
Showing up to HN and seeing your comrades immediately jump ship stings no matter who you are. And if you're Stripe leadership and you believe that you're playing an infinite game, then pissing off another similarly minded company (and supplier) isn't a good feeling either.
Unless you believe a company like Plaid is entitled to a monopoly and should be free from any semblance of competition, I don't see a problem with that.
What happened to free market capitalism?
However, I didn't really ask for anything. In fact, what I think that bestcoder69 is missing is that the person who is asking/showing empathy is actually PC.
If we look at what he wrote, he doesn't just come out and say something like tough luck for them, this is business, instead he says things like "we could have handled this better" and "...will retro this next week" and then lays out what the lessons should be for his team_
Just because empathy is important in business doesn't mean you aren't allowed to win.
Making it personal I don't think helps anyone.
People only "want competition" in the manner of controlled opposition, where they know they can beat someone.
rchaud find this to be a platitude, but frankly, I don't give a shit what he thinks. If I'm a good CEO, I care much more about how my employees react to the new competition than to how this internet rando feels about my public response.
It’s very difficult to bring up this topic in a constructive, thoughtful, and impactful way. But I urge you to really sit down and think carefully about it, even for a few minutes.
His tone was the tone I used to use. I still do, sometimes. I have to catch myself, because old habits are hard to break.
The reason I decided to break the habit is because it discourages people like my wife from becoming engineers, let alone founders. She’s one of the most talented hackers I know. And you’d be reasonable to suspect that I’m exaggerating or being nice because she’s a woman, but you’d be mistaken. If you’re a react dev, there’s a very strong probability that if you went head to hews with her in a “who can ship a great looking website faster?” contest, you would lose badly. I didn’t believe it until I saw it more than once.
The world is worse without people like her as engineers. And — most importantly — it’s worth altering our behavior in the default case, not to be nice or to be more inclusive, but because it will make everyone’s lives better in the long run.
Just some food for thought. It didn’t sink in for me until I pointed out she could be paid a lot more if only she’d aggressively negotiate. She mentioned “yeah, I know it’s how men do it.” A little switch flipped in my head. It doesn’t need to be this way; we decide to be this way.
I agree with everything you said, and I'd add that this is not unique to women. There are many creators who don't want to operate in a bro culture.
Personally, I consider it a strength to be able to work with _all kinds of people_, and communicate in ways that are effective to each of them.
Edit to add: My default communication is more inclusive. But there are definitely situations where a leader needs to be aggressive (e.g. against an external threat), and failure to do so can jeopardize the well-being of your own employees who aren't prone to that communication style themselves.
You're probably right that there are some fence sitters who were put off by that aggressive follow up. I hope they can judge the initial comment on its own merits, and challenge or ask for clarification if it's helpful.
"Waiters are literally paid..."
Or we could be humans?
Isn’t there a much more obvious NBA analogy here, which would actually make the CEO-empathy pleas appear even more ridiculous?
Were you attempting the move “X=Bad to me, Y=Bad to you, Bad=Bad, therefore X=Y”?
I'm gonna steal this.
There are all sorts of good ideas. Some are easy to communicate, some demonstrate, some both, some neither.
Ideas are worthless.
Once it was implemented in several crypto systems, including RSA, and people started using it, the value became clear.
Was the publication sold to anyone? Why did Ron Rivest, Adi Shamir and Leonard Adleman decide to create a company using the concept rather than just sell the publication itself?
I think you just proved my point.
I’m seeing people conclude a lot more about Plaid from the CEO’s outburst than from Stripe’s announcement. If a competitor throws into your ring and your first move is to call foul on technicalities, it suggests you don’t think you can win on merit alone.
https://www.cnbc.com/2020/07/22/slack-accuses-microsoft-of-a...
IMO, their welcoming of competition, on an even playing field, only strengthens their request that Microsoft compete fairly.
Some time back, Steve Jobs felt the same way about Apple employees being offered positions at other companies, so he sent an email to his "friends". The result was an illegal "gentleman's agreement" not to hire each other's employees.
Companies basing their decisions about entering a market based on what their "friends" at other companies think is market allocation, and it is illegal.
But, that's business.
Plaid has raised $700m+ and is valued $10+ billion according to Wikipedia. This move by Stripe is absolutely one that any competent leadership team should have expected would happen sooner or later.
Saying "I don't think anyone would argue that X" means "I don't think anyone thinks X".
"it's a blow to the chest for Plaid" is a coherent phrase
"I don't think anyone would argue that" is a coherent phrase that contains a pronoun, "that." The antecedent of this pronoun is that first phrase.
I don't think anyone would argue X can mean the statement X is so true nobody would argue it.
An example would be "I don't think anyone would argue the legitimacy of George Washington as the first president of the US" or "I don't think anyone would argue the merits of food when you're hungry"
Therefore the phrase can be correctly interpreted to mean:
I don't think anyone would argue that -> [it's a blow to the the chest for Plaid]
You mean: is so true nobody would argue AGAINST it.
The ambiguity is whether argue means FOR or AGAINST.
You mean growing their business?
What's wrong with that?
Not saying he shouldn't feel bad, or threatened, or upset -- those are perfectly valid feelings to have -- but airing those feelings like that is unprofessional and, frankly, pretty lame.
The problem is it looks like someone who feels they've been beaten. Twitter tantrums are precedented and tolerated for Silicon Valley CEOs at this point.
"Interview" turns out to be a job interview Jay had in 2014 before Jay even joined Stripe.
Jay started working on this product in 2019.
This is malicious. Plaid CEO intended to character-assassinate Jay.
Plaid just went from a decacorn to a cheap acquisition target for PayPal, Square, Shopify, etc.
I can understand this being absolutely gut wrenching for the founders and early employees that are still on board. It must feel like having tangible dreams crushed. Not as bad as a cancer diagnosis, but certainly worse than a rejection from your dream school.
Competition is an evolutionary force of nature. Brutal at times.
Probably most of them actually believed in the numbers though
We leave rich, but maybe not-as-rich as we thought?
Will you keep your old iPhone if you knew what the new version will do?
I buy a phone about every 5 years. Will I wait a year if I find out that the new phone has a different chip in it that does something amazing? Absolutely! I'll wait, not give Apple any money this year, and give them money next year.
The "test" is much older than Stripe but we often use it as a shorthand to ask ourselves whether we truly think a certain course of action is the right one.
I have no idea why most companies don't install this principle since the beginning.
I basically assume every email and slack message would be public at some point.
It is a bit extreme but it doesn't require that much effort to maintain such principle.
If you read about X on the front page (in potentially a negative light) would you feel good about it, could you stand behind it. This helps with clients who are considering going sideways. Usually their lawyer will make some long complex argument about why something is "OK" or "legal".
We might disagree technically as well (ie, no its not legal), but sometimes it is easier to ask, hey, if this were on the front page tomorrow, would you feel good about this? The reality is the board members or whoever who have a lot of reputation really would NOT be OK with whatever - and usually speak up at this point, particularly as their personal upside to doing whatever bogus BS is low and their downsides are often much higher.
and the consumer cant tell at any time.
I seriously cringe each time, lol.
Anyway, on topic, it’s good to see this little debacle behind them. Both stripe and plaid offer good services and competition is good in any case.
I do wonder if there’s some room for innovation here from Google and Apple. It would be interesting to see if it’s possible to login to any website using plain text passwords in a way that can be delegated to other sites without them knowing the password too.
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Thinking about this more, if browsers generally allowed this it would allow integrations between sites to be implemented pretty fast by simply scrapping text.
A better example is the tech emails twitter account that posts screenshots. How would I know if they are fake or not?
I would think a website with links to the source material such as the court filings showing the emails on a government website would be preferable.
it's pretty funny where you see this and twitter "threads" of like 14+ posts.
life is complicated, 140 characters is not enough.
In this case, it sounds like the original post was removed, so the only thing left would be images types of things. Also, does an image/screengrab add any more validity to something rather than text quoted on another page/site?
Frankly, this sort of thing has caused me to become a very regular user of Google Lens on my phone. I just copy the text out of the image and go on about my day.
Improving the usability of image -> text translation is probably the most effective way forward, as silly as that may seem.
Not that anybody ever uses that feature.
In the case of your comment, literally all of the replies were about the annoyance. Not one was about the on-topic portion of your comment; it might as well not have existed. That's why we have that guideline.
Mention Zach deleted his tweet, but not mention what he actually said: "Deleted tweet. Misunderstanding or different styles perhaps. Presuming positive intent."
All so underhanded
[0]https://twitter.com/zachperret/status/1522444749877088256
Edit: the classy way as an example is Airbus response to Boeing after their failure with the 747 Max or what. Now that's some clean PR well done. And they never had to.