The news: JPMorgan will charge fintechs fees to access its customers’ bank account information, per a report from Bloomberg.
- Fees will vary depending on how much a company uses the data.
- Payment-based companies like PayPal will be subject to higher levies.
The proposed fee guidelines are not final and may be subject to future negotiations.
What’s at stake: Fintechs have long relied on free access to their customers’ banking information.
If these fees do go into effect, players like PayPal, Robinhood, and Coinbase could incur devastating setbacks to their revenue and operations—and dramatically reduce the services they’re able to offer customers.
Regulatory advantage: The Consumer Financial Protection Bureau (CFPB) is planning to repeal the Biden-era Section 1033 open banking rule, according to legal filings.
JPMorgan can only proceed with its proposed fee structure if the rule is blocked by the courts or rescinded by the CFPB. But that seems likely given the CFPB’s legal motions under acting Director Jonathan McKernan.
Our take: This fee regime would be a pivotal win for JPMorgan that would undoubtedly be emulated by other banks anxious to tap a new revenue stream.
Banks are already striking back at fintechs by offering similar services of their own, like Zelle and Paze—and someday, maybe even stablecoins.
Fintechs—particularly payment fintechs—face a rocky road ahead. With many depending on free access to consumer information for decent margins, they’ll have to significantly reconsider their business models and the services they can offer without the data banks have so far reluctantly handed over gratis.
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