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Business Operations Business Models

How Does Plaid Make Money (Business and Revenue Model)

The Plaid business model

Plaid logo
Here’s what you should know:
  • What is Plaid, and how does Plaid work?
  • How does Plaid make money?
  • From fees they charge developers for API calls
  • Plaid subsidiaries, acquisitions, and exits
  • Plaid profit and revenue
  • What is the Plaid business and revenue model?
  • Plaid funding, net worth, and valuation

How does Plaid make money and how is it free to use? Well, here is a full, in depth, breakdown of their main revenue stream and services they offer, as well as the Plaid business and revenue model, how much Plaid makes per year, and how Plaid works.

What is Plaid, and how does Plaid work?

Plaid is a financial services company that uses its data transfer network to connect fintech and digital finance products to customers’ bank accounts.

Founded in 2013 by Zach Perret and William Hockey, Plaid now integrates with more than 12,000 financial institutions and connects them to more than 200 million customer accounts around the world.

So, how does Plaid work? To connect to Plaid as a developer, simply visit their website and head over to the ‘For developers’ section.

Once there, developers can find everything they need to get started such as finding the API documentation, as well as Github and library resources.

Some of Plaid’s competitors include Stripe, Yodlee, and other similar companies.

Plaid App in Apple App Store | Plaid Business Model | How Does Plaid Make Money? | How Does Plaid Work?
Source: Apple App Store | Plaid

How does Plaid make money?

According to Plaid, Plaid integrates with more than 12,000 financial institutions and connects them to more than 200 million customer accounts around the world.

So how does Plaid make money off of all these financial institutions they use their service to connect to their users?

Below is a breakdown of how much money Plaid makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here is how Plaid makes money in 2022

Plaid has a revenue model that makes money in just one (1) way; from the fees they charge developers for using their banking APIs.

#1. From fees they charge developers for API calls

Plaid makes all of its money from the fees it charges developers for using their service to connect to their customers.

As noted above, Plaid has more than 12,000 financial institutions, as well as more than 40,000 developers that use their banking APIs. Some of them include notable apps like Acorns, Dave, Venmo, Truebill, Betterment, Chime, and more.

Plaid charges the financial institution (or developer) a fee every time there is an API call. In more layman’s terms, Plaid charges them a fee every time a user connects their financial data to the developers’ app or service to grab information.

For example, every time a customer connects their bank account to Venmo using Plaid, Venmo pays Plaid a fee.

The types of fees they charge developers are; one-time fees, subscription fees, per-request flat fees, per-request flexible fees, and per-payment fees. Each of which have their own pricing models and are each used for different types of products.

Plaid Pricing:

  • Free: for testing up to 100 live items
  • Pay as you go: unlimited items, no minimum spend
  • Custom plan: volume pricing, minimum spend (starts at $500 per month)
Plaid Pricing | Plaid Business Model | How Does Plaid Make Money? | How Does Plaid Work?
Source: Plaid

Note: Plaid doesn’t charge customers, Plaid charges the apps.

Plaid subsidiaries, acquisitions, and exits

To date, Plaid Inc. has made a total of 3 acquisitions and 2 investments.

Mergers and acquisitions business model
Source: Crunchbase | Plaid

Plaid profit and revenue

Plaid has not released any official reports in regards to company earnings.

Note: Because Plaid Inc. is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Plaid business and revenue model?

Plaid makes money through a few revenue models that they combine within their company, they are:

  • Fee for service (FFS) business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

Plaid funding, net worth, and valuation

According to Plaid’s Crunchbase profile, Plaid has raised $734.3 million over 7 rounds and has a valuation of $13.4 billion as of August 2021.