Payments network MoneyGram says it has launched a partnership with Plaid.
The collaboration, announced Thursday (April 17), lets MoneyGram customers in the U.S. use Plaid’s technology to help authenticate their bank accounts, allowing for faster and more secure funding for both domestic and cross-border payments.
“The MoneyGram network moves money for over 50 million customers each year, across nearly every country in the world,” MoneyGram CEO Anthony Soohoo said in a news release.
“This partnership with Plaid expands our global capabilities to deliver faster, more secure payments for our customers. It’s a clear step forward in our mission to make cross-border payments seamless, affordable and secure for everyone.”
The release notes an increasing number of American consumers value the ability to link their bank accounts with financial apps, prizing pay-by-bank options for their ease, speed and additional security.
“Plaid provides the most widely used and trusted network across digital financial services, covering thousands of financial institutions across the United States, Canada, Europe and the United Kingdom,” said Brian Dammeir, head of payments and financial management at Plaid. “Now, MoneyGram can leverage the power of the Plaid network to quickly and securely drive conversion, reduce bank returns and proactively prevent fraud.”
The pay-by-bank solution connects to Plaid’s network of thousands of banks and credit unions, pairing that company’s instant account verification with MoneyGram’s compliance and anti-fraud systems, the release added.
Research by PYMNTS Intelligence and Trustly has shown that 6.4% of American consumers say they are already using pay by bank and 40% are at least somewhat interested in using the payment option.
Of that group, consumers who earn $100,000 or more per year were the most inclined to embrace pay by bank, with 42% saying they are intrigued or interested. The research found that higher-income consumers are among the earliest of adopters, with just under 10% of that demographic saying they are already paying by bank.
In an interview last year with PYMNTS CEO Karen Webster, Plaid’s Dammeir said that “the user experience is what’s really changing,” especially when it comes to paying bills. Traditional online bill pay requires users to remember or locate their account information, Dammeir added, a process prone to errors.
Pay by bank eliminates that friction, letting consumers digitally authenticate their account information, making payments via a streamlined, biometric-driven interface.
“It’s about modernizing bank-based payments and putting them on par with other methods in terms of user experience,” he said.
