Initiate a pay-by-bank payment via Plaid Payment Initiation (open banking)

In-depth guide

Steps

1. Create a payment recipient: POST /payment_initiation/recipient/create with 'name', 'iban' (for SEPA) or 'bacs' object (sort code + account number for UK), and optionally 'address'; receive a 'recipient_id'.
2. Create a payment: POST /payment_initiation/payment/create with 'recipient_id', 'reference' (narrative shown on bank statement, typically max 18 characters), 'amount.currency', and 'amount.value' as a float.
3. Create a Link token for the payment: POST /link/token/create including 'payment_initiation.payment_id' in the request; use this token to initialize Plaid Link on the frontend.
4. Launch Plaid Link with the token; the customer selects their bank and authorizes the payment via their bank's authentication flow (open banking redirect or in-app auth); on success, Link calls your onSuccess callback with a public_token (not needed for payment-only flows — the payment is already submitted).
5. Monitor payment status by calling GET /payment_initiation/payment/get with your 'payment_id'; poll or use webhooks ('PAYMENT_STATUS_UPDATE') to detect transitions through 'PAYMENT_STATUS_PROCESSING', 'PAYMENT_STATUS_EXECUTED', or failure states.
6. Reconcile by matching the 'payment_id' to your internal order; 'PAYMENT_STATUS_EXECUTED' means the bank has accepted the instruction, but actual settlement time varies by scheme (SEPA Instant = seconds, standard SEPA = 1 business day, BACS = 2 business days).