Plaid and Square announce partnership to better provide ACH payments

The official announcement states that Square, a leader in the payment processing market, and Plaid, a fintech technology platform which connects applications to users bank accounts, are joining forces to make ACH payments easier to use and cost-effective for consumers.

Plaid‘s platform currently allows customers to authorize bank accounts faster, turning a previously long and cumbersome process into the touch of a button. The partnership will merge this technology into Square Invoices, allowing merchants to accept ACH payments through the platform and for developers to enable ACH payments through the Square Web Payments SDK without having to deal with bank authentication.

The partnership will also allow customers to use Plaid to securely connect their bank accounts for bank payments. This means that instead of having to use debit cards, consumers can quickly and directly link bank accounts.

Square’s plan for the partnership is to use ACH payments to help businesses process larger transactions online without the worry of bank authentication, compliance or managed payment complexities, according to Dennis Jarosch, head of Square’s payment platform.

This provides the customer higher security over debit cards, which can be lost or stolen. It also allows businesses to collect payments on orders with more certainty than making collections.

Square, founded by Twitter co-founder Jack Dorsey, offers payment processing, business financing, appointment scheduling and payroll management services to merchants on its platform. The company’s Cash App (formerly Square Cash) competes as one of the largest P2P money transfer applications, reporting over 36 million monthly active Cash App customers as of December 2020. 

Plaid is a fintech platform that enables applications to connect with user’s bank accounts, founded in 2013 by Zach Perret and William Hockey. The platform helps businesses and customers to interact with specified bank accounts through payments, balance checks and other interactions; Plaid cuts through the complicated and previously slow authentication process to make bank account management faster and easier.

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