The Promise of Payroll APIs | Andreessen Horowitz

Payroll companies are realizing the power and value of their data and are angling to become part of the economic value chain. Gusto, for example, is launching more partnerships to become users’ financial hub, and ADP is investigating how it might allow consumer-permissioned data to be used for new use cases.

Much as Plaid relies on connectivity to banks for bank data, payroll APIs rely on connectivity to the underlying payroll systems. One interesting dynamic will be how platform accessibility plays out. Banks have a love-hate relationship with Plaid, in that they’re often reluctant to allow consumers to access their data via third parties. That retice... See more

Universal access to payroll data holds promise for lenders, neobanks, employers, and B2B fintech companies in distinct and interesting ways.

A new set of platform players are emerging that follow a similar pattern. Much as Plaid allowed consumers to make their bank transaction data available to fintechs, these new platforms are giving fintechs access to payroll, insurance, credit, and ERP data.

The importance of Plaid and the API market more broadly cannot be overstated—an entire generation of neobanks, lenders, and financial management tools have been made possible through programmatic access to bank transaction data.