Plaid Fintech

Expert patterns for Plaid API integration including Link token flows, transactions sync, identity verification, Auth for ACH, balance checks, webhook handling, and fintech compliance best practices.

Patterns

Link Token Creation and Exchange

Create a link_token for Plaid Link, exchange public_token for access_token. Link tokens are short-lived, one-time use. Access tokens don't expire but may need updating when users change passwords.

// server.ts - Link token creation endpoint import { Configuration, PlaidApi, PlaidEnvironments, Products, CountryCode } from 'plaid';

const configuration = new Configuration({ basePath: PlaidEnvironments[process.env.PLAID_ENV || 'sandbox'], baseOptions: { headers: { 'PLAID-CLIENT-ID': process.env.PLAID_CLIENT_ID, 'PLAID-SECRET': process.env.PLAID_SECRET, }, }, });

const plaidClient = new PlaidApi(configuration);

// Create link token for new user app.post('/api/plaid/create-link-token', async (req, res) => { const { userId } = req.body;

try { const response = await plaidClient.linkTokenCreate({ user: { client_user_id: userId, // Your internal user ID }, client_name: 'My Finance App', products: [Products.Transactions], country_codes: [CountryCode.Us], language: 'en', webhook: 'https://yourapp.com/api/plaid/webhooks', // Request 180 days for recurring transactions transactions: { days_requested: 180, }, });

res.json({ link_token: response.data.link_token });

} catch (error) { console.error('Link token creation failed:', error); res.status(500).json({ error: 'Failed to create link token' }); } });

// Exchange public token for access token app.post('/api/plaid/exchange-token', async (req, res) => { const { publicToken, userId } = req.body;

try { // Exchange for permanent access token const exchangeResponse = await plaidClient.itemPublicTokenExchange({ public_token: publicToken, });

const { access_token, item_id } = exchangeResponse.data;

// Store securely - access_token doesn't expire!
await db.plaidItem.create({
  data: {
    userId,
    itemId: item_id,
    accessToken: await encrypt(access_token),  // Encrypt at rest
    status: 'ACTIVE',
    products: ['transactions'],
  },
});

// Trigger initial transaction sync
await initiateTransactionSync(item_id, access_token);

res.json({ success: true, itemId: item_id });

} catch (error) { console.error('Token exchange failed:', error); res.status(500).json({ error: 'Failed to exchange token' }); } });

// Frontend - React component import { usePlaidLink } from 'react-plaid-link';

function BankLinkButton({ userId }: { userId: string }) { const [linkToken, setLinkToken] = useState<string | null>(null);

useEffect(() => { async function createLinkToken() { const response = await fetch('/api/plaid/create-link-token', { method: 'POST', headers: { 'Content-Type': 'application/json' }, body: JSON.stringify({ userId }), }); const { link_token } = await response.json(); setLinkToken(link_token); } createLinkToken(); }, [userId]);

const { open, ready } = usePlaidLink({ token: linkToken, onSuccess: async (publicToken, metadata) => { // Exchange public token for access token await fetch('/api/plaid/exchange-token', { method: 'POST', headers: { 'Content-Type': 'application/json' }, body: JSON.stringify({ publicToken, userId }), }); }, onExit: (error, metadata) => { if (error) { console.error('Link exit error:', error); } }, });

return ( <button onClick={() => open()} disabled={!ready}> Connect Bank Account </button> ); }

Context

• initial bank linking
• user onboarding
• connecting accounts

Transactions Sync

Use /transactions/sync for incremental transaction updates. More efficient than /transactions/get. Handle webhooks for real-time updates instead of polling.

// Transactions sync service interface TransactionSyncState { cursor: string | null; hasMore: boolean; }

async function syncTransactions( accessToken: string, itemId: string ): Promise<void> { // Get last cursor from database const item = await db.plaidItem.findUnique({ where: { itemId }, });

let cursor = item?.transactionsCursor || null; let hasMore = true; let addedCount = 0; let modifiedCount = 0; let removedCount = 0;

while (hasMore) { try { const response = await plaidClient.transactionsSync({ access_token: accessToken, cursor: cursor || undefined, count: 500, // Max per request });

  const { added, modified, removed, next_cursor, has_more } = response.data;

  // Process added transactions
  if (added.length > 0) {
    await db.transaction.createMany({
      data: added.map(txn => ({
        plaidTransactionId: txn.transaction_id,
        itemId,
        accountId: txn.account_id,
        amount: txn.amount,
        date: new Date(txn.date),
        name: txn.name,
        merchantName: txn.merchant_name,
        category: txn.personal_finance_category?.primary,
        subcategory: txn.personal_finance_category?.detailed,
        pending: txn.pending,
        paymentChannel: txn.payment_channel,
        location: txn.location ? JSON.stringify(txn.location) : null,
      })),
      skipDuplicates: true,
    });
    addedCount += added.length;
  }

  // Process modified transactions
  for (const txn of modified) {
    await db.transaction.updateMany({
      where: { plaidTransactionId: txn.transaction_id },
      data: {
        amount: txn.amount,
        name: txn.name,
        merchantName: txn.merchant_name,
        pending: txn.pending,
        updatedAt: new Date(),
      },
    });
    modifiedCount++;
  }

  // Process removed transactions
  if (removed.length > 0) {
    await db.transaction.deleteMany({
      where: {
        plaidTransactionId: {
          in: removed.map(r => r.transaction_id),
        },
      },
    });
    removedCount += removed.length;
  }

  cursor = next_cursor;
  hasMore = has_more;

} catch (error: any) {
  if (error.response?.data?.error_code === 'TRANSACTIONS_SYNC_MUTATION_DURING_PAGINATION') {
    // Data changed during pagination, restart from null
    cursor = null;
    continue;
  }
  throw error;
}

}

// Save cursor for next sync await db.plaidItem.update({ where: { itemId }, data: { transactionsCursor: cursor }, });

console.log(Sync complete: +${addedCount} ~${modifiedCount} -${removedCount}); }

// Webhook handler for real-time updates app.post('/api/plaid/webhooks', async (req, res) => { const { webhook_type, webhook_code, item_id } = req.body;

// Verify webhook (see webhook verification pattern) if (!verifyPlaidWebhook(req)) { return res.status(401).send('Invalid webhook'); }

if (webhook_type === 'TRANSACTIONS') { switch (webhook_code) { case 'SYNC_UPDATES_AVAILABLE': // New transactions available, trigger sync await queueTransactionSync(item_id); break; case 'INITIAL_UPDATE': // Initial batch of transactions ready await queueTransactionSync(item_id); break; case 'HISTORICAL_UPDATE': // Historical transactions ready await queueTransactionSync(item_id); break; } }

res.sendStatus(200); });

Context

• fetching transactions
• transaction history
• account activity

Item Error Handling and Update Mode

Handle ITEM_LOGIN_REQUIRED errors by putting users through Link update mode. Listen for PENDING_DISCONNEC