Striped suit and cage for battle – TechCrunch
Latest product news from Stripe and Plaid show that the two private companies are striving for each other as the B2B financial technology market matures, expands and individual players increasingly overlap.
It may seem silly that Stripe, best known for its payment technology, and Plaid, best known for its API, which connects consumer bank accounts with third-party services, compete. This is not the case.
The quote: “All software tastes like chicken from a financial standpoint” is both funny and true. This is also largely true for fintech companies, but for a reason unique to this space: fintech startups, unicorns and even state-owned companies are seeking to expand their capabilities over time by adding more and more competencies.
Both B2B and B2C startups have similar motives. Attracting customers (advertising, adaptation, etc.) is expensive and competitive, so once a tech technologist attracts a user or customer, it’s best to get as much value out of them as possible. That’s why companies like Plaid and Stripe are building and buying to meet more and more of their customers ’needs – until they find themselves on each other’s doorstep.
What happens when they do? We’re going to find out.
Recent clashes since the Great War in fintechnology
In January 2022, Plaid announced it was buying Cognito, a TechCrunch solution wrote was part of a step “beyond simply connecting accounts”. In essence, Cognito has added to its list of Plaid features “Know Your Customer” (KYC) tools and anti-fraud tools. By doing this, it can offer its customers much more than just connecting to an account.
In 2021, Plaid bought a company called Flannel, which focused on payments. Through account connections, security tools, and payment technologies, Plaid has built and bought its way into a larger potential common target market – one that is already under attack by other private financial technologies.
Obviously, Stripe has expanded the feature set from the original competency. The company has so many services that its on-site menu is becoming more of a catalog than an organizational tool. Seeing the company here and there launch something new, nothing out of the ordinary.
But in early May, when Stripe announced Financial Connections, the service that will be TechCrunch wroteallow your customers to “connect directly to their customers’ bank accounts to access financial data to expedite or execute certain types of transactions, ”we noted.
The product announcement put Stripe at the forefront of Plaid’s core business, even if it was fair play – the latest company has already stated to the market that it implies payouts under the 2021 Flannel deal.
However, Plaid clearly made an exception to the fact that its leaders had in mind that it was a cunning means of obtaining information and a lack of transparency on the part of the Stripe in light of their partnership and history.
When the two companies fussed over each other on Twitter, it was clear that the gloves, as far as they could be in the API world, were taken off.