Plaid vs. Sila: Understanding This Partnership

Plaid vs. Sila: Understanding This Partnership

You need to do your research when choosing a banking partner. After all, you want to choose a company who makes sense for your needs and will help you long term. 

Naturally, you’ll want to understand what you’re getting into when you partner with Sila.  Sila is not like most payment providers and in fact can connect you to other providers, like Plaid, to provide payment features in fintech apps. 

By partnering with Sila, you gain access to a unique technological platform, incomparable customer support, embedded compliance, insane levels of scalability, the ability to integrate smart contract technology, and the benefits of a fintech marketplace not found anywhere else. 

In this article, we will compare Plaid versus Sila so that you can understand the differences and similarities between our services. We’ll also get into the services of Plaid that support Sila. 

What are Infrastructure Banking Solutions?

Infrastructure banking solutions are solutions that companies need to build the next fintech innovation. 

Infrastructure banking solutions differentiate between integratable payment solutions because they provide banking infrastructure, like access to FDIC-insured accounts, whereas payment solutions will facilitate consumer transactions.

You’ll mostly want banking solutions like Sila so that you can build payment apps and other businesses. These solutions exist because of the highly regulated U.S. financial markets. In order to provide a payment platform service, a digital wallet API, or money transfer services, the client has to be approved through the existing financial regulations and ACH requirements. 

Banking infrastructure companies like Sila do a lot of the heavy lifting for you so that you don’t have to worry about becoming a bank and having to fill all of those compliance requirements. The benefit is that you can create a bank transfer service, among so much else, and engineer new business opportunities

With a secure banking platform as a partner, you can create solutions to real problems. 

How Does Plaid Work?

Plaid is an integratable banking solution in the United States. One of the primary features that Plaid is known for is bank connectivity and bank account linking; however, there are a number of things that Plaid can help out with. 

With Sila, Plaid is the bank account linking partner. This is how that feature works within our use cases:

  • A company will partner with Plaid to provide bank account linking for their customers, keeping that data secured in their company.
  • A new business might need a subscription with Plaid, but their customers might only need a login. 
  • Users are prompted to connect bank accounts via Plaid so that money can be transferred to their bank account once the services have been rendered. 

We can use a common fintech solution as an example: a modern-day Venmo option. Venmo is a peer-to-peer money transfer service for U.S.-based customers only. (In this example, let’s say that Plaid is Venmo’s bank account linking partner). 

Venmo users will sign up with the Venmo platform and then, after their identity is approved, they will be able to move forward and connect their bank account to the platform. This is useful because Venmo is a money transfer app. So whenever the user gets money, they’ll eventually need some way to get it out of the app. 

To link a bank account, the user will navigate through Plaid who connects to most banks in the U.S. The Venmo app will never store the username and password information but allow that bank account to be accessed specifically through this user. Plaid facilitates this authorization. 

Because these connections are secured within an API and through a login, the apps are extremely safe. There is usually the Advanced Encryption Standard (AES-256) and Transport Layer Security (TLS) on these apps. Other standard security measures in API like secure cloud infrastructure and security audits are also conducted. 

Through Plaid’s partnership, the users in our Venmo example don’t have to give Venmo their bank account data. This means that one less company has their bank account information, and one less chance for someone to hack that company and gain access to it. 

There are clear advantages to using a Plaid partnership. Plaid is used in this way by companies all over America as well, so consumers know that they can trust in this secure partner for bank account linking rather than giving their information to multiple companies. 

How Does Sila Work?

Let’s position Sila in terms of this Venmo example. In this example, Venmo was created by Sila. Sila was able to provide the ACH API connectivity, the bank wallet API feature, the consumer identity verification so all consumers are checked upon entry, and the bank account linking feature. The Venmo business owners would come to Sila to create their Venmo app.

Thanks to Sila’s B2B API, the Venmo business owners would have access to:

  • A secure ACH API, which enables the ability to send money along the ACH network (the only money moving network in the U.S. and the one that moves through the Automated Clearing House [ACH] and the Fed)
  • A secure bank wallet API, which enables users in the Venmo app to store the money once it’s sent to them from their friends or family in the Venmo app
  • The ability to link their bank account using Plaid, so money can be deposited into their bank account from that bank wallet.
  • KYC/KYB checks so that user identities are checked before they have access to any other features.

With Sila, users can actually build an app and integrate the digital banking infrastructure that they need in order to build an amazing product. They’ll have access to Sila’s digital banking wallet (with Sila’s bank wallet API), Know Your Customer (KYC) and Know Your Business (KYB) for identity verification (through Sila’s partner Alloy), ACH debit and credit capabilities, and bank account connectivity with Plaid. This app can then be resold to customers. 

So, unlike the Venmo example, which was direct to the consumer, Sila is business-to-business. Sila gives users, business owners, CEOs, and entrepreneurs the ability to create an app fit with money transfers. 

And as a bank agent standing with Evolve Trust, all Sila’s clients have access to Evolve’s bank ledger. No money is stored on the client’s end or on Sila’s end, and compliance is embedded

Sila Banking

Sila takes the Plaid model one step further by giving users even more features, benefits, and opportunities. They literally give users the keys to drive their own car. With Sila on their side, users have access to everything that they need to create the next fintech solution. 

Sila also built its own fintech marketplace, which enables users to easily add on and integrate more features as they grow. Instead of finding a service on their own, they can easily tap into the marketplace to quickly add card issuance, international money transfer, and more. 

And if users bring their own smart contract technology, they can even access Sila’s SILAUSD stablecoin alternative for stablecoin issuance. 

Sila vs. Plaid

As you can see, it’s a bit difficult to compare Plaid and Sila. On the one hand, Plaid is facilitating bank account linking services for companies all over the United States. And on the other hand, Sila is using Plaid as their bank account linking partner and providing clients with even more tools for creating the next fintech innovation. 

If you are a company and you already have a website and just need to process payment, then Plaid would be something that you would consider. Additionally, if you wanted to operate like Sila and provide users the ability to create their own fintech applications, then you could partner with Plaid.

However, if you want to create an app with financial money transfer technology, then Sila is your go-to. 

If you do decide to go with Sila, then you will need a Plaid AUTH account (for the time being), and luckily Sila customer success agents can help guide you on this. In most scenarios, Plaid will largely remain separate from their partners but that’s not always the case. 

Choosing Sila for Your Next Fintech Idea

If you’re ready to move forward on your next fintech idea, perhaps with remittance or business-to-business money transfers, then Sila is the way to go. Not only do we have superior technology, but we do connect with powerful fintech players so that your business can evolve as your needs do. 

You aren’t locked into any one direction with Sila. When you get started, users have access to the ACH API, the bank wallet API, KYC/KYB API, and compliance support. And as you grow, you can always API connections through the Sila Fintech Marketplace in things like card issuance, international money transfers, and smart contract technology through our partners. 

Interested? See what all the fuss is about and see how Sila can take your business to the next level. 
If you have questions, reach out to anyone here at the Sila team. You can always check out our product demo every Thursday, check out our Youtube or head over to our sandbox to test the product yourself!