Earlier today, the payments giant Strip has announced a new product that fills some significant gaps in its game to be a layer of financial services for merchants and other businesses whose models are based on enabling transactions, according to Ingrid Lunden of TC.

This new product is called Financial relations and the company says it will give Stripe customers a way to connect directly to their customers’ bank accounts, gain access to financial data to speed up or execute certain types of transactions.

If that sounds familiar, it’s because it’s almost exactly what another fintech giant, Plaid, is already doing. And Stripe’s move positions the company directly against Plaid, a former partner.

A brief introduction for strangers: Stripe was valued at $ 95 billion a year ago and now according to reports getting closer to an IPO. Founded in 2010 by John Collison (president) and his brother Patrick Collison (CEO), Stripe saw the value of building a simple way for developers to integrate payments into any application or site through multiple lines of code at once when digital and on -especially online payments began to develop.

Plaid, which – as mentioned above – helps to connect consumers’ bank accounts with financial applications, in April 2021 raised D-Series D $ 425 million at an estimate of $ 13.4 billion. The nine-year-old company made headlines last year when a $ 5.3 billion deal with consumer loan giant Visa failed due to regulatory concerns, an event many say has been a hidden blessing to begin with.

The tension now is that some people, including Plaid CEO and co-founder Zachary Peret, believe Stripe may have used his connection to Plaid to gather information on how to build this type of product.

Both Carre and Rice declined to comment.

But in a tweet in response to Stripe PM’s own Jay Shah tweet about his company’s new product, Perret wrote: “Wow! Jay, you’ve interviewed Plaid and asked test questions many times over the last few years, and your team has been sending us multiple RFPs (according to the NDA!) Asking for tons of details. I wish you all the best with these products, but it’s surprising to see the methods. “

Interestingly, the new Stripe product is powered by Plaid MX and Finicity competitors. While some may argue that Plaid does not have an open banking market, others seem more upset that Stripe may not have been transparent with Plaid about its intentions.

And until Perret spoke to the media, he was quite vocal in Hacker News for the differences between Plaid’s offer and what Stripe just released. In this exchange, he goes back and forth with Stripe’s Edwin on various aspects of what the two companies are doing.

The news is probably not a shock to Perret or Plaid, because on March 29 he quoted a tweet from Patrick Collison about the release of the first ACH support product from Stripe, saying only that it is “cool” to see the company’s message and that there is “There’s a lot to come.” These updates to Stripe’s ACH Debit product were a hint of news today, as it was released with the ability to instantly verify bank accounts, a feature that competes with Plaid’s Auth product.

The two companies were partners, given this at one time. The Plaid website has details of a partnership between the two companies to “offer seamless money transfers without ever having to process an account or routing number.” The language there said:

Use Plaid connection to instantly authenticate your client’s account and automatically generate a Stripe bank account token so you can accept ACH payments through them ACH API. This guide is intended for those who already have an ACH-enabled account in Stripe and Plaid. If it’s not you, go to Stripe ACH documents to get started. From there you will be able to register for a Plaid account.

It is unknown at this time what he will do after leaving the post. But in light of today’s news, even if it is still technically, his future looks precarious.

From partners to competitors: What Stripe’s latest move means for Plaid

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