Visa shutters U.S. open-banking unit amid data access disputes

Visa Inc. has closed its U.S. open-banking division, a move that underscores escalating tensions between traditional banks and fintech companies over access to consumer financial data. The division provided fintechs with tools to access bank data, facilitating smoother sign-ups and money transfers. However, disputes between banks and fintechs have fueled uncertainty in the sector.

A Bloomberg report in July indicated that JPMorgan Chase had informed fintechs they would have to pay potentially hefty fees to access its customer data. PNC Financial CEO Bill Demchak has also said his bank was considering such a move. Banks argue these fees are necessary to recoup the cost of safeguarding and delivering customer data, while fintechs contend that customers should have free access to their information, and the fees would harm their business.

Visa has stated it will now focus its open banking strategy in high-potential markets like Europe, where regulations mandate data sharing with licensed entities. In contrast, the U.S. lacks comprehensive rules, leaving adoption to private. The closure of Visa’s U.S. open-banking.

Efforts to clarify the framework in The Consumer Financial Protection Bureau has initiated a rewrite of its regulations governing.