AWS and Plaid on Democratizing Payments and Improving Customer Experience

Fintech companies see the value of collaboration when it comes to payments, making payment capabilities more accessible through the latest technological innovations.

This type of collaboration has worked well for Amazon Web Services (AWS) and Plaid. In a recent conversation, Mark SmithHead of Payments Business and Market Development at AWS, John AndersonHead of Payments at Plaid, and Tim SloanVice President of Payments Innovation at Mercator Advisory Group, discusses how AWS and Plaid are working to democratize payments for everyone.


AWS and Plaid on Democratizing Payments and Improving Customer Experience

PaymentsLog AWS and Plaid on Democratizing Payments and Improving Customer Experience

Democratize payments

For nearly a decade, Plaid has provided account connectivity to its customers by securely connecting a favorite app to their bank account. This ultimately translates into no less than 12,000 bank connections.

“[Many] Americans and Europeans are using Plaid to access products — from financial services, including Robinhood, to transferring money like they would with Venmo,” Anderson said. “Often our customers use Plaid to connect [their] bank account and then use that connection to allow people to fund an account balance. This aspect really took off and started to grow.

“There is this interesting commonality between [Plaid and AWS]”, Anderson said. “We’re both democratizing super-powerful capabilities and then opening them up to a broad ecosystem — from startups to Fortune 1000 companies.”

AWS’ Smith also agrees that the focus is on democratize payments, as well as a focus on developers and engineers. “We’re really trying to help customers around the world democratize things like artificial intelligence [AI] and machine learning [ML],” he said. “[You want to] make it easy and avoid having a team of data scientists to build, deploy, and improve their use of machine learning for various things around payments.

“We see a lot around fraud prevention and credit extensions, but there are only a ton of use cases and a ton of customers who have been able to benefit from it,” he said. he adds.

On collaboration, Smith noted that it’s important for teams to find the best way to collaborate when there are shared customers and partners. “How can we come together as an ecosystem and together change the face of the industry? And those are just some of the ways we’ve worked with Plaid,” he said.

Harness data and analytics to create impactful customer experiences

There have been a lot of acceleration in the payments space, especially since the onset of the pandemic in 2020. As a result, businesses and their partners are shifting their focus to the end-customer experience.

“We help our customers, from enabling new payment methods to reducing payment costs,” said Smith. “Customers like Plaid use all the data that accompanies accounts and payment transactions to reduce fraud and false positives to create a good customer experience. And more and more companies are turning to AI/ML to manage high volumes of data and provide valuable real-time insights and constantly improve these models to stay ahead of fraudsters.

Payments are also becoming more contextual – this includes integrated financing, opening up new payment methods or opening up credit at the point of purchase. “We’re seeing some savvy customers using modern data analytics to ensure they’re targeting the right customers, at the right time, in the right channel, with the right product,” Smith said.

Digital Payments: New Use Cases

Anderson has personally seen a broad evolution of more internet native capabilities and services working together to help people through a recent experience he had. “I’m trying to buy a car and the prices have gotten really expensive,” he said. “I love buying used cars and if I go on Craigslist, where can I find[ing] someone to buy a car [from]I’m not going to show up with $10,000 or $20,000 in my pocket.

“It gets really tricky, and I don’t even know if people still have warrants today,” he said. “You have these amazing products, like Carvana, that make that shopping experience easier in terms of browsing online. But a big part of that is how they were able to help the actual transaction and payment layer.

According to Anderson, Carvana also uses KYC (Know Your Customer) information for verification and to ensure a safe market. This allows customers to move their money safely and efficiently in order to purchase a vehicle.

Anderson also detailed Plaid’s latest products: Signal and Transfer. Signal sees patterns in customer transactions, providing an opportunity to predict returns. This may be due to insufficient funds or concerns generated by customers. “We can then establish a very reliable transaction connection through Signal, and then the last coin actually moves into the money.” Anderson said.

And for companies and developers who have never initiated an automated clearing house (ACH) payment, there is a product called Transfer. Transfer makes it easy to integrate with Plaid – the connection, security and authorization to move and settle funds.

Putting the choice in the hands of consumers

Another philosophy shared by AWS and Plaid is to give the customer choice. Neither company dictates to its customers which partners they should work with. “What’s best for the customer is our focus,” Smith said. “As much as possible, if they have a choice, you give them that choice.”

Indeed, many customers come up with certain needs as to how they choose to transfer their money and which specialized processing partners they prefer to work with. Plaid believes in deep integration with all partners to allow these connections to be safe and secure. In addition, each vertical has its own needs. By meeting these needs, fintechs will be able to serve more customers.

“By providing APIs [application programming interfaces] to make all of this possible, it allows you to find the vertically oriented fintechs, which can change the payout structure to be able to meet the specific needs of that particular vertical market or customer base,” Sloane said. “Each vertical has its own particular needs.”

#AWS #Plaid #Democratizing #Payments #Improving #Customer #Experience

Related Articles

Back to top button