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Plaid buys ID verification firm Cognito

Plaid buys ID verification firm Cognito

Open banking giant Plaid has acquired identity verification and compliance platform Cognito in a deal reported to be worth around $250 million.

Cognito's technology is used by hundreds of digital finance firms - including Plaid customers such as Affirm, Brex, Current, Republic and Wyre - to quickly, simply and safely verify users while ensuring KYC and AML compliance.

Plaid says that Cognito helps it offer a complete onboarding experience, which consists of three critical parts: verification, account connection, and account funding.

Says Plaid CEO Zach Perret in a blog: "With Cognito, the next major step in our journey is to help developers build the best and most seamless onboarding experiences across all of these areas.

"This means simplifying every step of the consumer journey from their first interaction during signup, to the first magical moment delivered by that product - the first time sending money to a friend, or the first time trading a stock or cryptocurrency."

The deal marks another expansion beyond Plaid's core API-based data sharing business since the firm's blockbuster acquisition by Visa was blocked last year by the US Justice Department over competition concerns.

Recently, the $13 billion fintech put together an ecosystem of payment partners in North America and Europe - including Square, Dwolla and Currencycloud - for a move into account-to-account payments.

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