The news: Visa reportedly shut down its open banking operations in the US, per Bloomberg, a striking shift from one of the biggest names in payments amid the turmoil of the CFPB’s 1033 rulemaking.

How we got here: Open banking regulation in the US is a mess.

• The CFPB finalized open banking rules in October 2024. The rules had won praise from at least one top Republican, and some had speculated that the rule would survive President Donald Trump’s full-scale assault on the agency.
• Those hopes lasted until May, when the CFPB under acting Director Russel Vought first said that it would modify the rule and later asked a court to vacate the rule entirely.
• Before the rule was even gone, JPMorgan Chase said that it would start charging fintechs to access customer data. PNC indicated that it would follow suit.
• Fintechs and crypto advocates—including Trump’s eldest child—decried the move and advocated for preserving 1033.
• That outcry culminated in the August decision to temporarily preserve the current 1033 rules and instead begin a new rulemaking process to revise them.

An anonymous source told Bloomberg that Visa’s decision was “made independently of JPMorgan’s change in strategy.” But even if it wasn’t the inciting factor, it was the first domino in a potential cascade of new fees that would have made Visa’s open banking operations untenable.

Visa retrenches: Scrapping its US open banking operations is an abrupt change in strategy for a company that once tried to buy Plaid for $5.3 billion. (It settled for Tink in 2021.)

Open banking was a multi-pronged play for networks. Around the same time Visa was trying to buy Plaid, Mastercard bought Finicity. Open banking helped Visa and Mastercard offer a host of new value-added services. It also gave them an angle to avoid disintermediation if consumers and businesses adopted open banking-powered A2A payments where they previously used card networks.

While it’s difficult to assess how much total open banking-related business Visa was doing in the US, Tink’s total payment activity, by proxy, is meager—an estimated 0.25% of Visa’s $16 trillion in annual payment volume.

Our take: We warned that open banking-dependent businesses would be forced to drop certain services, charge new fees, or close up shop altogether if charging for financial data gained critical mass. It appears Visa took the final option in the US. (Visa said it is instead focusing on more promising markets like Latin America and Europe.)

The open banking rule isn’t gone. But given that up until a few weeks ago the CFPB had sided with the banks trying to scrap the rule, the version of Section 1033 that results from the new rulemaking will likely be some combination of watered down, toothless, or otherwise “open” banking in name only.

As more banks tack on fees to access consumer data, we’ll likely see other open banking players fold or seek acquisitions from bigger firms like Plaid or Finicity/Mastercard. The open banking field in the US will get smaller, and the remaining companies will either seek deals with individual banks—like Coinbase got with JPMorgan—or find new ways to monetize their services to offset higher costs.