I posted the below in a similar thread.
Tl;dr Plead is a service that specializes in allowing financial type apps the ability to access bank account information without the app having access to the underlying bank credentials. If Coinbase has a data breach, your bank account credentials will be safe (balances as of the breach may be compromised). Obviously if Plead suffers a data breach, your credentials would potentially be compromised.
So I click on Bank account right? I see other options are paypal, debit card and wire transfers. But when I click on bank account, it wants to use Plaid to connect to my bank account? When I click on BoA, I am suppose to enter my BoA online banking information? If so, is that safe? But after doing this, then my bank account is
My understanding is that Plaid is a service that financial related apps will use in order to allow the end user to connect their bank information to the app. This allows a random person to create an app that accesses bank information that users can use without having to trust the random person with sensitive bank username and passwords.
I believe Coinbase uses Plaid to access bank balance information. They want to know if a bank account has available funds prior to attempting to debit the bank account. This prevents losses by Coinbase when they lock in the price when someone uses funds in their bank account to buy bitcoin.