You connected your bank to an app and saw a small logo at the bottom: "Powered by Plaid." Maybe you didn't think much of it. Maybe it made you nervous.
Either way, Plaid is worth understanding — because it's quietly involved in most of the fintech apps people use every day.
What Plaid Is
Plaid is the infrastructure layer that sits between financial apps and banks. In one sentence: it's a service that lets apps read your bank data without ever handling your banking credentials themselves.
That's the core job. Plaid handles the messy, bank-specific details so that thousands of apps don't have to.
Why Plaid Exists
Banks were not built with third-party access in mind. Each bank has its own login system, its own data format, its own quirks. There is no universal standard for "give this app read access to my transactions."
Plaid solves that. It maintains connections to 10,000+ US financial institutions and presents a single, consistent API to the apps built on top of it. Instead of every app figuring out how to talk to Chase, Wells Fargo, and your local credit union separately, they just talk to Plaid.
How It Works, Step by Step
When you click "Connect Bank" in an app that uses Plaid, here's what happens:
- The app opens a Plaid-hosted modal — a small window served entirely by Plaid, not the app
- You search for your bank and enter your credentials directly into Plaid's interface
- Plaid authenticates with your bank and stores an encrypted access token
- Plaid returns transaction and account data to the app via API
- The app uses that data going forward — it never sees your credentials at any point
The app you're connecting to never receives your bank username or password. Those credentials go to Plaid and stay there.
ℹ️ Info
The Plaid modal looks like part of the app, but it's actually a separate, Plaid-hosted interface. The app that launched it cannot read what you type into it.
What Plaid Shares — and What It Doesn't
Plaid shares a limited, defined set of data with connected apps:
What Plaid shares:
- Transaction history (date, merchant name, amount, category)
- Account balances
- Account names and types (checking, savings, etc.)
What Plaid does not share:
- Your bank login credentials
- Your Social Security number
- Full account numbers
- The ability to move or transfer money
Plaid is read-only for transaction data. It has no capability to initiate transfers, make payments, or touch your money in any way. It reads; it does not write.
Plaid vs. Screen Scraping
Before services like Plaid existed, the only way for an app to access your bank data was screen scraping: you'd give the app your actual bank login, and it would log in as you, load your account pages, and copy what it saw.
That approach was fragile, risky, and gave the app full access to your account — because it was literally you, as far as the bank knew.
Plaid replaced that model. Where official bank APIs are available, Plaid uses them. Where they aren't, Plaid has direct data-sharing agreements with financial institutions. Either way, the third-party app is no longer logging into your bank as you.
💡 Tip
If you've used an older personal finance app that asked for your full bank login and stored it, that was screen scraping. Modern Plaid-based apps work differently — your credentials never leave Plaid's systems.
Plaid's Security Credentials
Plaid is used by some of the most heavily scrutinized companies in consumer finance:
- Venmo — peer-to-peer payments
- Coinbase — crypto exchange
- Robinhood — brokerage
- Acorns, Betterment, SoFi — and thousands more
Plaid holds two major independent security certifications:
- SOC 2 Type II — independently audited controls covering security, availability, and data handling
- ISO 27001 — the international standard for information security management
These aren't self-reported claims. They require third-party audits on a recurring basis.
How to See and Revoke Access
You can see every app that has Plaid access to your accounts — and revoke any of them — at my.plaid.com. This is Plaid's consumer privacy dashboard.
You can also disconnect from within most apps themselves, or revoke third-party access from your bank's own security or settings page.
How SheetLink Uses Plaid
SheetLink uses Plaid to connect your bank accounts and pull transaction data into Google Sheets. When you connect a bank through SheetLink, your credentials go to Plaid — not to SheetLink's servers.
SheetLink receives transaction data (date, merchant, amount, category) via Plaid's API and writes it directly to your spreadsheet. SheetLink does not store your transaction data on its own servers — it passes through and lands in your Sheet.
If you want to go deeper on the broader question of whether connecting your bank to third-party apps is safe — including how to evaluate any app, not just SheetLink — read Is It Safe to Connect Your Bank Account to a Third-Party App?.