Fintechs are pushing back against JPMorgan Chase’s data access fees, which could reach $300 million a year for some of the largest users. These charges would apply when fintechs access consumer account data via APIs or aggregators, for use in digital wallets and other open-banking services. The charges would start to apply this month.
The conflict arose from the Trump administration’s decision to try to rescind Section 1033, a Biden-era open-banking rule that mandates free access to consumer financial data. The fees would vary based on how the fintechs use the customer data, with higher charges for those involved in payment processing.
JPMorgan says its proposed fees are a cost-recovery measure for API development and fraud detection. It also argues that Section 1033 is unconstitutional.
The bank has said it has no issue with sharing data with fintechs and that its fees remain negotiable. But according to the proposed charges, the costs for fintechs that rely on this data, such as Plaid and MX, could be 10 times their per-transaction revenue, threatening their ability to stay in business.
Public Comments
More than 80 fintech and crypto industry leaders recently signed a public letter urging President Donald J. Trump to intervene on the banks’ plan to impose “account access fees” on third-party financial service providers. Stripe filed its comments after the Consumer Financial Protection Bureau requested public discussion of the recission of Section 1033.
“The largest banks should not be permitted to charge prohibitive fees for data access while the CFPB considers how to address those same fees through the ANPR (Advanced Notice of Proposed Rulemaking) process and while an existing rule prohibits such fees,” Stripe said in its comments. “Therefore, Stripe urges the CFPB to consider all options that would deter such fees until a comprehensive revised rule is in place.”
Who Owns the Data?
European regulators have mandated that banks share data with third parties for free, while the United States has left banks and fintechs to negotiate terms privately. U.S. fintechs were able to receive banking customer data for free, like their European counterparts. The core question is whether this data belongs to the banks or to the consumers.
“In some markets, particularly in Europe, there are mandates to share information,” said Brian Riley, Co-Head of Payments at Javelin Strategy & Research, “But this creates a burden for top players who made investments early in the tech cycle. Chase has made deep investments in its technology.
“At the same time, consumers have a right to use their data. It is a clear example of how regulatory controls in payments need to keep pace with technology and plan for an ever-changing market.”
