The news: Stripe asked the Consumer Financial Protection Bureau (CFPB) to preserve fee-free open banking as the agency revises Rule 1033.

How we got here: JPMorgan said it will charge fintechs fees to access customers’ financial information. PNC Bank is considering following suit. 

Fintechs like Stripe are in a state of panic: Their business models, products, and viability are built on largely free access to customer data.

What’s at stake: Stripe and fintech peers like Plaid will face serious cuts to their revenues and operations, resulting in service cuts or locking some features behind paid subscriptions.

• Betterment and Rocket Money said they will need to raise prices and eliminate their free versions of their product to survive JPMorgan’s new fees, per a Forbes report.
• Visa also shuttered its US open banking operations stateside in response to the tumult over Rule 1033.

Our take: For now, Section 1033 will remain in place. But as rulemaking proceeds, Stripe’s appeal to the CFPB may fall on deaf ears. 

The new rule will likely be a defanged version of its predecessor. We expect more firms will pursue Coinbase’s route—carving out individual deals with JPMorgan—or close up shop like Visa.

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