Two fintech megaliths, financial data and infrastructure platform Plaid and merchant services company Square formed a partnership this week that will offer merchants a smoother experience when it comes to ACH payments.
Through the deal, U.S. merchants can process ACH payments without storing clients’ bank account information. Square is leveraging a tokenized check system that uses Plaid to help customers connect their bank accounts. Plaid enables customers to enter their bank login credentials to connect their account and enable the payment.
This system works especially well for businesses that take payments for high-value orders. That’s because it increases the certainty that they payment will go through. Making acceptance even easier, Square offers fee-free refunds on ACH payments processed.
“Payment flexibility, security, and transparency are core to Square’s Payment Platform,” said the Head of Square’s Payment Platform Dennis Jarosch. “By offering ACH payments, we can help businesses process large transactions online at a low cost without worrying about bank authentication, compliance, or any managed payment complexities. We’re excited to offer ACH as one of many ways that businesses get paid fast and securely with Square.”
For Plaid, this news comes shortly after the company closed a $425 million round of funding. Plaid was founded in 2012 to build APIs to connect consumers, financial institutions, and developers. Today, the company also offers a suite of analytics products that provides further insights into transactions.
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