Getting Started with Plaid in 3 Minutes

Summary

Plaid offers a unified API for financial services, enabling access to identity verification, income information, and bank connections. It simplifies data retrieval with consistent querying across different financial institutions. Users can sign up for an account and utilize three environments: Sandbox for testing with fake data, Development for real data with limited accounts, and Production for full access with billing. The process involves generating a Link Token for user authentication and account selection via the Link UI widget, exchanging it for an access token to make API calls for services like account verification, credit lines, and personal finance apps. Plaid also supports webhooks for real-time updates and offers a dashboard for application insights.

Takeaways

• 💡 Plaid provides a unified set of endpoints to help build powerful financial services.
• 🌍 It allows identity verification with global sources, income retrieval from payroll providers, and connection to thousands of banks.
• 🔗 Plaid can be used for account verification, credit approval, and building personal finance apps.
• 🧑‍💻 Developers can start with the Plaid dashboard, which offers three environments: Sandbox (fake data), Development (limited real data), and Production (full access, billed usage).
• 🔑 Plaid requires clientID and secret for API calls, which can be retrieved from the dashboard, and SDKs are available to simplify API integration.
• 🛠️ Plaid's Link widget allows users to sign in to their banks and give permission to access their data, handling the connection process.
• 🔒 A public token is returned after user authentication, which is exchanged on the server for a persistent access token to access the user's financial data.
• 📊 Plaid supports various endpoints, including Auth (account numbers), Transactions (historical data), and Asset Reports (loan decisioning).
• 📢 Plaid offers webhooks to provide updates, such as account issues or new data availability.
• 📈 The Plaid Dashboard offers tools for monitoring application usage, debugging API calls, and managing bank connections.

Q & A

What is Plaid and what does it offer?

Plaid is a platform that provides a set of APIs to help developers build financial services. It offers functionalities such as identity verification, retrieving income information, and connecting to thousands of banks to allow users to share their financial data.

How can Plaid be used in financial services?

Plaid can be used for account verification, approving customers for lines of credit, and building personal finance applications by querying and receiving data from financial institutions in a consistent manner.

What are the three different environments available on the Plaid Dashboard?

The three environments are Sandbox, Development, and Production. Sandbox uses fake data for initial testing, Development provides access to real data from a limited number of accounts, and Production offers unlimited access to real data with billing.

How does the Plaid API authentication work?

API authentication with Plaid involves making calls from your application server that include your clientID and secret, which can be obtained from the Plaid Dashboard. Plaid SDKs can simplify this process by including these credentials with every API call.

What is the role of the Link widget in the Plaid process?

The Link widget is a UI component that handles the process of users signing into their bank, selecting accounts to share, and giving Plaid permission to access their data. It simplifies the user interaction required to connect to their bank.

What is the purpose of a Link Token in Plaid?

A Link Token is used to initialize the Link widget on the client-side. It is generated by the server by calling the linkTokenCreate endpoint and is then sent to the client to start the connection process with the user's bank.

How is the public token exchanged for an access token in Plaid?

After the user completes the connection process with their bank, a public token is received. This token is sent from the client to the server, where it is exchanged for a persistent access token by calling the itemPublicTokenExchange endpoint.

What can be done with the access token obtained from Plaid?

The access token can be used to make API calls to retrieve data on behalf of the user, such as account numbers, transaction histories, and asset reports, or to utilize other Plaid products and services.

How does Plaid notify developers of important updates?

Plaid can send webhooks to proactively notify developers about account issues or when more data is available, keeping them informed about the status of their application and user connections.

What resources does Plaid offer for developers to learn more and get support?

Plaid offers a full-length tutorial, a YouTube channel with instructional videos, and detailed documentation for developers to learn more and get support for developing with Plaid.

Outlines

00:00

💼 Introduction to Plaid's Financial Services API

Plaid offers a unified API for building financial services, enabling interaction with identity verification sources, payroll providers, and thousands of banks. It facilitates consistent data retrieval for various financial operations like account verification, credit line approval, and personal finance app development. To begin, users sign up on the Plaid dashboard, gaining access to three environments: Sandbox for testing with fake data, Development for real data with limited accounts, and Production for full access with billing. API calls from the application server require clientID and secret, which can be managed through Plaid SDKs. The Link UI widget simplifies user bank account connections, and the process involves generating a Link Token, initializing Link, and exchanging a public token for a persistent access token to make API calls for data retrieval and other Plaid-supported products. Webhooks keep users informed of account updates, and the Plaid Dashboard provides usage insights and support.

Keywords

💡Plaid API

The Plaid API is the core tool discussed in the video, enabling developers to connect their applications to financial institutions and retrieve user data. It provides a consistent way to access financial data for various purposes, such as account verification or building personal finance apps. This API is central to the entire integration process with banks.

💡Link

Link is the UI widget that allows users to securely sign in to their bank accounts and select which accounts to share with the app. It handles most of the user interaction and simplifies the process of granting permission to access financial data, which is then passed back to the application. Link plays a key role in connecting apps with users' bank data.

💡Sandbox environment

The Sandbox environment is one of the three environments provided by Plaid, designed for testing with fake data. It allows developers to explore the functionality of the API without the risk of dealing with real bank accounts, making it ideal for initial development stages. The script encourages using Sandbox when starting out with Plaid.

💡Access token

An access token is a persistent token generated after exchanging a public token. It is used by the server to make API requests on behalf of the user. This token is essential for retrieving data from financial institutions and is stored on the server for future API calls, allowing continuous access to the user’s bank data.

💡Public token

A public token is a short-lived, single-use token that is generated after the user connects their bank account through Link. It serves as a temporary identifier that the client sends to the server, where it is exchanged for a permanent access token. The public token ensures security by limiting its lifespan and purpose.

💡Webhooks

Webhooks are automatic notifications sent by Plaid to inform the application of updates, such as issues with a user’s account or new data availability. They allow developers to proactively handle problems or new information without constantly polling the API, improving efficiency in monitoring and responding to changes.

💡ClientID and secret

The ClientID and secret are unique identifiers provided by Plaid, used to authenticate API calls. These credentials are included in nearly every request made to the Plaid API, ensuring that the calls are coming from a legitimate source. They are critical for secure communication between the app and the Plaid API.

💡Link Token

A Link Token is created when the server requests a connection between the user and the bank via Link. It contains configuration details like the required products and language settings, and is passed to the client to initialize the connection process. This token is essential for starting the flow of connecting users to their banks.

💡Plaid SDKs

Plaid SDKs are software development kits provided by Plaid to help developers integrate the API into their applications. They simplify tasks like passing ClientID and secret in API calls, managing tokens, and handling user interactions with Link. The SDKs streamline the development process by providing pre-built solutions for common tasks.

💡Plaid Dashboard

The Plaid Dashboard is a control panel where developers can manage their Plaid account and monitor API usage. It provides access to credentials like the ClientID and secret, as well as reports on bank connections, API call statuses, and debugging tools. The Dashboard is essential for both setting up and maintaining the integration.

Highlights

Plaid offers a unified API for building financial services.

Plaid can connect to identity verification sources and payroll providers.

It provides access to thousands of banks for user data retrieval.

Plaid is used for account verification and credit line approvals.

Personal finance apps can be built using Plaid's data.

Sign up for a Plaid account to access different environments.

The Sandbox environment is for testing with fake data.

Development environment provides access to real data with limitations.

Production environment offers full access to real data with billing.

API calls from your server require clientID and secret for authentication.

Plaid SDKs can automate the inclusion of clientID and secret in API calls.

The Link UI widget handles the user's bank login and data sharing.

Link Token is generated by the server to initialize the Link widget.

The public token is exchanged for a persistent access token on the server.

Access token is used to make API calls for user's financial data.

Plaid supports endpoints like Auth, Transactions, and Asset Reports.

Webhooks notify about account issues or data availability.

Plaid Dashboard provides application usage and debugging information.

A full-length tutorial and documentation are available for further learning.

Transcripts

Plaid provides you with a single set of endpoints  that help you build powerful financial services. 

Whether it’s talking to identity  verification sources around the world… 

Retrieving income information  from payroll providers… 

Or connecting to thousands and thousands  of banks on behalf of your users… 

Plaid will let you query and receive data  in a consistent manner. So you can use Plaid  

for everything from account verification, to  approving customers for lines of credit, to  

building some pretty great personal finance apps. You can get started with Plaid by signing up for  

an account on the Plaid dashboard. There you’ll  have access to up to 3 different environments. 

The Sandbox environment deals completely  with fake data and is the best option to  

use when you’re first starting out. Development gives you access to real  

data at real banks, but for a limited  number of accounts – it's best to use  

this with a handful of trusted testers. And Production gives you unlimited access to  

real data, but you’ll be billed for your usage.  You may not have access to this right away. 

To talk to the Plaid API, you’ll be  making calls from your application  

server. Nearly every call you make  will include your clientID and secret,  

so we know it’s really you. You can get this  information from the Plaid Dashboard, and the  

Plaid SDKs can simplify this process for you by  including this data with every call you make. 

On the client, your user will do the  work of signing in to their bank,  

selecting what accounts to share with you, and  giving Plaid permission to access their data.

This is done through a UI widget called Link  that handles all the heavy lifting for you. 

So the general process for connecting  to most Plaid products looks like this:  

When your user is ready to  connect your app to their bank,  

your server will talk to Plaid  to generate a Link Token. 

You’ll do this by sending a call  to the linkTokenCreate endpoint,  

and passing in some information about how you’d  like to configure Link – such as what products  

you want to require, what language to use,  and often some product specific information. 

What you’ll get back is a Link Token.  Send that token up to your client. 

From there, you can use Plaid’s client-side  library to initialize Link – you’ll pass  

in the Link Token, along with some methods to  call when the user successfully completes Link,  

or exits out early. Once you’ve done that, you  can open up Link to start the connection process. 

At this point, your user will sign in to their  bank, select what accounts they want to share  

with you, and possibly perform other setup  steps depending on the products you’re using. 

When your user is done connecting to their  bank, you’ll get back a public token – this  

is a short-lived single use token that has  only one purpose, and that’s for your client  

to send it down to your server where you  can then exchange it for an access token. 

You’ll do this on the server by making  a call to itemPublicTokenExchange – send  

over the public token from your client, and  you’ll get back a persistent access token. 

Save this access token on your  server – you’ll use this whenever  

you need to request data from this financial  institution on behalf of this specific user. 

At this point, you can use this access token  to start making calls against the Plaid API.

This might include the Auth endpoint to  retrieve the user’s routing and account numbers… 

…the Transactions endpoint to get a list of recent  – or historical – transactions for this account… 

…Asset Reports, to help you with  loan underwriting or decisioning. 

Or one of the many other products Plaid supports. Plaid can also send you webhooks, so that we can  

proactively let you know about important updates,  like if there’s a problem with an account,  

or if more data is available for you to fetch. And be sure to visit the Plaid Dashboard, where  

you can get information like your application’s  overall usage, the status of specific bank  

connections, or reports on individual API calls  to help you with debugging and support cases.

This has been Getting Started  with Plaid in 3 minutes.

If you want to know more about developing  with Plaid, check out our full length  

tutorial that shows you how to get started  with a working sample application. Visit  

our YouTube channel for more videos  like this one, and be sure to visit  

our documentation for more details about  all of the Plaid products. Happy coding!