Visa has unexpectedly ended its US open-banking business, putting a damper on fintech startups that rely on easy access to customer bank data. This move cools the momentum of open banking, which has been a major growth driver for fintech firms.
Big banks like JPMorgan Chase are now imposing stricter fees on fintechs using customer data, citing cybersecurity and delivery costs. PNC Financial is also considering similar actions. The Consumer Financial Protection Bureau’s review of who controls access to your data raises questions about the future of fintech business models.
The US open-banking market drew over $20 billion in venture capital last year, but rising costs and regulatory changes could make it harder for upstarts to survive or scale. Established banks reclaiming control may push public fintech share prices lower if growth slows or expenses climb.
The Consumer Financial Protection Bureau’s rules on data sharing will decide whether you control your financial information or if banks keep the keys. In Europe, regulations forced banks to cooperate with regulated apps, sparking competition and innovation. The US is still choosing its path, and the tug-of-war over data rights could define the next wave of digital banking solutions.
Source: https://finimize.com/content/visa-shuts-down-us-open-banking-stirring-fintech-friction