Does Venmo Use Plaid [Yes, understand why]

Venmo, a product of PayPal, is a popular peer-to-peer payment app that allows you to send, receive money and make your daily payments. If you use Venmo and are curious to know if Venmo uses Plaid service, you are on the right post to get the complete details.

To give a straight answer: Yes, Venmo uses Plaid as one of the ways to link your bank account with Venmo.

But let’s understand if it’s necessary to use Plaid with Venmo, why is it offered, and are there any options to avoid using Plaid.

Venmo is an online wallet that allows you to connect your bank accounts so that you can move money in and out of Venmo. You can also directly make payments from a linked bank account using Venmo (similar to Apple Pay)

And how do you link a bank account to Venmo? That’s where Plaid comes into the picture.

Plaid is a service that connects financial technology companies to banks, using the online bank account credentials of users. It is not feasible for a fintech app like Venmo, Acorns, Robinhood, etc., to support linking to all the banks its users may have an account with, due to infrastructure compatibility issues and time constraints.

Now, to link a bank account you need to verify if the user is the genuine owner of the bank account. The way to do this is by asking for details to authenticate that you own the account. This is where Plaid helps as it is able to validate the banking credentials entered by the user and confirm with the bank.

Does Venmo Use Plaid

Yes, Venmo uses Plaid as one of the ways in which you can link your bank account instantly with Venmo.

But Plaid is not the only option to link your bank account with Venmo. You can check our detailed guide on how to use Venmo without Plaid for the steps.

You can link a bank account by using manual verification, instead of using online bank credentials. For this, you just need to share the account and routing number. Venmo will then do a micro-transaction in your bank account and you will need to confirm the details to verify the ownership. Alternatively, you can just link your bank account debit card with Venmo.

In effect, you can link a bank account to Venmo in three ways

  • Linking your bank account using Plaid with your online banking credentials
  • Linking your bank account using manual verification (takes up to 3 business days)
  • Linking your bank account debit card

So while Venmo uses Plaid as a way to link your bank account, it is not mandatory to use Plaid on Venmo and you certainly do have options.

Why is Venmo making me use Plaid?

Venmo uses Plaid as a way to verify the user is the owner of the bank account with help of the online credentials before you can link the bank account with Venmo.

However, it is not mandatory to use Plaid on Venmo using other ways. You have the option to add your bank account manually in Venmo using micro-transfers, which do not go through Plaid. However, this process can take 1-3 business days.

You can also link your bank debit card instead of linking your bank account. In fact, Venmo allows you to add up to 4 debit or credit cards.

You also have the option of not linking your bank account at all. But then you are not able to fund Venmo on your own and may have to a cash withdrawal for cashing out your Venmo funds (using a Venmo debit card at ATM)

Is Plaid Safe?

Plaid is a legit institution that acts as a middleman between fintech (financial apps) and banks. It helps fintech apps establish a secure connection with banks. Plaid partners with more than 5,000 fintechs, and supports connections to more than 11,000 financial institutions.

Plaid uses various techniques like encryption, multi-factor authentication, secure cloud infrastructure, and security reviews to protect user data. And given the no. of banks and fintechs they support, it can be a big reputation risk for them to have any data privacy-related issue.

You can read more on what type of data they collect and how Plaid handles user data on their website.

It is a growing company with a valuation of more than $13 billion, that charges fees to financial apps for the service. As per Plaid statistics, 1 in 4 US adults has used Plaid to connect their financial apps to banks.

Apps that use Plaid include popular names like Chime, Betterment, CashApp, Ally, Sofi, etc.

1 in 4 US adults has used Plaid to connect their financial apps to banks.


However, there have been controversies. There was a lawsuit where Plaid ended up paying a settlement to users with respect to the interface used (which appeared similar to bank) and having collected more data than needed. While Plaid denies wrongdoing, they agreed to settle.

Plaid also provides a portal where users can create an account and view which financial apps are connected through Plaid and the data being shared with the app. You have options to disconnect or request data to be deleted from Plaids systems.

It depends on the exact arrangement between your bank and Plaid, if the credentials are accessible and if they are stored by Plaid when you use it to verify your bank account on Venmo.

That being said, if you’re skeptical about sharing user data, you can go for manual verification on Venmo or simply add your bank debit card.

You can also choose to open a separate bank account for your use on Venmo, which is different from your main bank account. Here you can maintain a low balance and don’t mind linking with Plaid.

Wrap Up

So Venmo uses Plaid to enable you to link a bank account. But it is not mandatory and you have options if you want to avoid using Plaid.

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I have a passion for finance and technology. On this blog, I share helpful information on products and services that we use in our daily lives and simplify things I learned the hard way.

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