Pay via Square/ACH. Why does Plaid need access to transaction history?

Question

I just paid an invoice sent to me via Square. Okay, cool. Vendor says ACH preferred, saves money. I agree, yeah. Only option Square offers to pay via ACH is Plaid. Plaid wants login info to my bank, and will also access transaction history as part of the "agreement". WTF? I just want to pay one ACH transaction. Plaid also settled a class action suit for collecting data against user's will and without their knowledge? I searched around, but I can't tell if everyone is cool with just handing over their complete banking transactions, or they don't use Plaid at all? What is going on?

phoenixy1 · Accepted Answer

I can't speak to the Plaid/Square integration specifically and why transaction history is requested in that case, but in general, a common reason Plaid would want transaction history for an ACH transfer is to do risk assessment for ACH returns. The product marketing page for Signal explains what the merchant is getting out of it: https://plaid.com/products/signal/

tobinfekkes · Answer

I just refuse to use Plaid at all. They'll get a paper check in the mail before I use Plaid.
Also, the Square "feature" where they email me a receipt for a transaction that I never provided my email was/is very unsettling. And then they make you create an account in order to access the page where you can unsubscribe from the receipts you never subscribed to in the first place.
The whole thing is insane.

bkraz · Answer

The class action lawsuit: https://news.ycombinator.com/item?id=28200076