Introduction to Plaid Signal

Plaid Signal evaluates the likelihood of a specific transaction resulting in an ACH return. Signal is powered by a machine learning model and data relating to the consumer's linked bank account, and is designed to provide a result in under one second. Signal simplifies payment risk management by:

• Evaluating payments through Signal Rules, a no-code dashboard that allows you to react quickly to changing trends

• Suggesting custom rules based on your payments and returns activity, allowing you to easily set thresholds for accepting payments

• Providing over 60 predictive insights that you can incorporate into your own risk assessment models

Signal considers over 1,000 risk factors to evaluate proposed transactions. Over time, as you use it, it will provide more customized and refined recommendations.

Plaid Signal can evaluate the risk of US domestic transactions over ACH (both Standard and Same Day ACH). Signal cannot be used to evaluate RTP or RfP transactions, debit card transactions, transactions to or from a non-US bank account, or wire transfers.

Plaid Signal works in two steps:

First, it analyzes and summarizes the level of risk a transaction poses into a risk score.

Second, it uses rulesets to turn these scores into actions. You must create and tune these rulesets to match your business's risk tolerance.

When you call /signal/evaluate, Signal will generate a risk score for a proposed transaction, predicting the likelihood of returns due to insufficient funds, closed or frozen accounts, and other administrative bank returns, as well as consumer authorized returns. A higher risk score indicates a greater likelihood that the transaction will result in an ACH return.

To turn these risk scores into an action, you will configure a Signal Ruleset. Signal can suggest an initial set of rules to approve payments below a certain risk score threshold. Signal provides you with access to both the aggregate score and over 60 predictive insights, allowing you to set up simple score-based rulesets or to create more complex rules.

The shape of this graph (how many transactions are low risk versus high risk) is unique per customer. Reporting returns will allow the Signal Dashboard to provide you with personalized recommendations for adjusting score thresholds.

It is recommended that you roll out Signal in stages to collect data, then use the Dashboard tools to adjust your approval logic at each rollout phase.

1. Create a new Item with Signal or add Signal to an existing Item.

2. Create a Signal ruleset using the Dashboard.

3. Call /signal/evaluate and determine the next steps based on results.

4. Report ACH returns and decisions to Signal.

5. After launch, periodically review and tune your Signal Rules using the Dashboard.

Signal is billed on a per-request fee basis based on the number of calls to /signal/evaluate. For more details, see per-request flat fee billing.