Plaid names ex-Meta exec as its new head of payments • TechCrunch

Plaid announced today that it has appointed Meta veteran John Anderson to serve as its new Head of Payments.

The fintech startup has slowly evolved its offerings beyond its core account-linking product. Earlier this year, it switched to identity and income verification. Payments feel like a natural evolution of the business.

In an interview with TechCrunch, Anderson explained that while Plaid will personally facilitate payments through the transfer offering, it will also continue to work with its dozens of payment partners, which include the likes of Square, Stripe, Marqeta, Gusto, and Silicon Valley Bank. The end goal is generally to give consumers more choice when it comes to bank payments.

“There has been so much innovation at POS [point of sale] in the last 10 years, but purely digital – no physical interaction – experiences for payments are still nascent,” he said. – This is where we are focused.

In its own way, Anderson pointed out, Plaid has been involved in digital payments for years, enabling nearly a billion ACH transactions for things like account funding and account-to-account transfers. Along the way, the company collaborated with almost 50 payment companies.

In other words, Plaid has services for customers that range from account verification to risk assessment and treatment. It has also built its computer products to be modular with the goal of “maximizing choice” for its customers and “ultimately expanding the use of bank payments.”

“This time last year, same-day ACH was growing nearly 75% year-over-year in the trillions — that’s a lot of growth for an already significant number,” Anderson said. “There is a lot of market for a lot of players, and overall Plaid works with a wide network of payment partners. We plan to invest — not shift — in that ecosystem and strategy.”

So overall, when it comes to payments, Anderson said, Plaid is focused on building products that help companies have “more cost-effective, efficient and flexible bank payments.”

“A lot of that work is through our partners, as ultimately we want to maximize choice for consumers and businesses,” he said. “This is why we take an ecosystem approach to payments. It’s not us versus them, but instead a ‘we’ working together to innovate and create better infrastructure that’s safer, smarter and faster for all participants.”

As mentioned, Plaid’s payment partners include frenemy Stripe, which unveiled its own new product in May. Specifically, Stripes Financial Connections was designed to give the company’s customers a way to connect directly to customers’ bank accounts, to access financial data to expedite or drive certain types of transactions — exactly what Plaid has done historically.

In working with its payment partners over the years, Anderson said Plaid saw a consistent challenge — that it typically took several days for an ACH transfer to complete.

“That’s because it allows settlement time to cover assessment of returns and fraud,” he said. “But this transfer speed is very limiting for many of our customers – if you’re someone like Robinhood who wants to be able to get customers to fund their account immediately and immediately start trading, 2-3 day ACH clearing time feels like a lifetime.”

Trying to solve that challenge led to the genesis of Plaid’s Signal offering, which uses machine learning to analyze more than 1,000 risk factors and provide scores and insights that Plaid says provide “more certainty that a transaction will work out,” allowing a company can accelerate access to these funds without increasing risk.

“We wanted to use intelligent data signals to be able to identify low-risk ACH funding events that can be removed immediately,” he said. “By accurately predicting risk and fraud, we can help businesses build much more real-time financing solutions so their consumers can get started on their financial goals immediately.

Signal today is moving out of beta, where Robinhood was a pilot customer. In addition to Robinhood, fintechs such as WeBull and Uphold have incorporated Signal into their risk models “to unlock instant ACH,” Anderson said.

“We currently de-risk almost 3 million transactions worth almost $1.5 billion every month,” he said. “We are excited to offer this service to more customers and empower them to expand the applicability of ACH-based bank payments and transfers more safely and securely.”

Looking ahead, he said, Plaid is actively building and collaborating on real-time payment rails.

Plaid’s RTP and FedNow products are designed to help drive further adoption of bank payments, Anderson said, “not only because of the speed and security of settlement, but also through further innovation across the financial and payments ecosystem.”

“We want to unlock the next phase of bank payments by focusing on a great consumer experience, adapting Signal for new risk and fraud vectors, and other activities that will accelerate the adoption of real-time payments in the US through our payment partners and customers,” said Anderson.

Also, in an interview with TechCrunch, Anderson explained his decision to join Plaid. The executive left Meta in March after a 10-year stint that included serving as the company’s head of payments and commerce.

Anderson said he was drawn to the space because “finance is at the heart of everyone’s life.” Acknowledging that “the world is increasing in inequality”, the leader described financial access as an “uneven competition that is becoming increasingly bumpy”.

“In so many of this amazing generation of new financial services, the common thread is that Plaid is there in the background helping them build secure data access, fast payments and manage risk and compliance,” he said.

It is not Anderson’s first foray into fintech. He developed a fintech app called GroupCard that was acquired by InComm, a $13 billion prepaid and payment technology company. He also once worked in payments on eBay.

“As an early fintech app developer, I experienced firsthand the challenges that many of Plaid’s customers face today,” he said. “On a very personal level, I came to Plaid because I wanted to build sustainable products and a societal impact on a scale that my grandchildren will be proud of.”