John Anderson has a 20 year career building innovative payments platforms. He left Meta a few months ago to join Plaid to take the firm deeper into payments.
John recently joined us on our podcast to discuss payments trends and where Plaid is headed with payments, given its recent launch of Signal, a tool that assesses and scores risk with ACH payments.
5 questions with Plaid's John Anderson
What is Plaid up to with payments?
John Anderson, Plaid: Not a lot of people know that Plaid already is deeply powering payments. Even at the time [of the Visa acquisition], people were saying that Plaid is going to get into payments – I think Plaid already was at that point working in payments. We started 10 years ago working on allowing people to have greater financial connectivity and link accounts.
But what has really transpired through that time is a vast chunk of our customers are using Plaid not just for giving people greater capability in fintech apps, but also establishing that connection to understand someone's bank information to get them facilitating account funding. And so it's already been the case even today. We're powering over a billion ACH transactions a year through the connectivity that we're enabling through partners.
Where does Plaid sit in the payments stack?
John Anderson, Plaid: A lot of people historically know Plaid through our Auth product, which allows people to establish account connectivity. And the vast majority of our customers work together with a lot of our partners to process those payments. So, we work with 50 or more of leading companies that do bank payments, whether that's Square, Checkout.com, or others. Our customers can bring their own processor, and they use Plaid to do the connectivity in the process. That's historically where we've seen such huge long term growth.
On top of that, we recently launched Signal, which allows our customers to move that money faster through machine learning and better risk management. We also have a product called Transfer, which is for customers who just want one provider. They can come to Plaid to do their processing, as well as account connectivity.
How is ACH evolving alongside credit and debit?
John Anderson, Plaid: So whether it's buy now, pay later, or prepaid cards (my last company was in prepaid, so I watch that closely), we see these micro versions of finance start to show up in more day to day use cases for how people end up transacting and living their lives. And those are use cases where we see ACH today, and maybe some future bank rails someday, really becoming more applicable. So at least what we're seeing today, it isn't necessarily like stealing share from credit or even debit, but instead, just growing the overall liquidity that people have and the different services they use, and by allowing them to more instantly move the money around between their services.
Are banks getting better at sharing data and leveraging their value in the ecosystem?
John Anderson, Plaid: FIs are absolutely central. Plaid now has connections with over 10,000 different financial institutions. And what has been really fascinating is the level of innovation and development that's happening there. I think a big power behind that is consumer preference, shifting to being excited about and demanding greater connectivity from their bank or from their financial institution, and then that has kickstarted a whole new world of innovation, where we see a lot of our financial institution customers actually spearheading a lot of the new innovation on how data and privacy work to ultimately unlock a lot more value for customers.
What do you think about crypto payments?
John Anderson, Plaid: I haven't seen crypto materialize as a viable independent rail. True, the transaction costs were real. Second of all, you always had the on ramp. And so crypto's native payment method for say commerce, I think is still a reasonable ways out. That said, we're still pretty early in the value that a lot of crypto can have for people as an asset, in particular. I think it's going to take awhile before it becomes an actual commerce payment rail