Latest product news from Stripe and Plaid show that the two private companies are fighting for each other as the B2B financial technology market matures, expands and individual players increasingly overlap.

It may sound silly that Stripe, best known for its payment technology, and Plaid, best known for its API, which links consumers’ bank accounts to third-party services, are competing. Not so.

The quote “All software tastes like chicken from a financial point of view” is both funny and true. This is largely true for fintech companies, but for a reason unique to space: fintech startups, unicorns and even public companies tend to expand their capabilities over time, adding more and more competencies.

Both B2B and B2C startups have similar motives. Attracting customers (advertising, onboarding, etc.) is expensive and competitive, so once fintech attracts a user or customer, it is best to get the most value out of them. That’s why companies like Plaid and Stripe build and buy to serve more and more of their customers’ needs – until they find themselves on each other’s doorstep.

What happens after they do? We are yet to find out.

Recent fights from the Great Fintech War

In January 2022, Plaid announced that it was buying Cognito, a solution that TechCrunch wrote was part of a move “beyond simply linking accounts.” In essence, Cognito has added its Customer Knowledge Tools (KYC) and anti-fraud tools to Plaid’s list of features. In this way, he can offer his customers much more than just linking accounts.

In 2021, Plaid bought a company called Flannel, which focuses on payments. With account links, security tools and payment technologies, Plaid was building and buying its way to a larger potential common target market – one that is already being attacked by other private fintech companies.

It is obvious that Stripe has expanded its range of functions far from its original authority. The company has so many services that its on-site menus become more of a catalog than an organizational tool. Then seeing the company release something new here and there is not uncommon.

But in early May, when Stripe announced Financial Connections, a service that TechCrunch says will allow its customers to connect directly to their customers’ bank accounts to access financial data to speed up or execute certain types of transactions ”, we took note.

The product announcement clashed Stripe with Plaid’s core business, even if it was fair play – the latter company had already told the market that payments were on its mind through the 2021 Flannel deal.

However, Plaid apparently made an exception to what its leaders thought was a vile means of acquiring information and a lack of transparency on the part of Stripe in light of their partnership and history.

After the two companies fussed against each other on Twitter, it was clear that the gloves, as far as they can be in the world of API, have been removed.

Stripe and Plaid suit up for battle

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