SAN FRANCISCO—Visa has shut down its U.S. open-banking business, Reuters reported, as friction between banks and fintechs over customer data access continues to intensify.
The move comes amid growing uncertainty about the future of open banking in the U.S., where—unlike Europe—no regulations require banks to share data with third parties.
Tensions have been escalating. In July, Bloomberg reported that JPMorgan Chase warned fintechs they may face steep fees to tap into its customer data, and PNC Financial CEO Bill Demchak signaled his bank could follow suit. Banks argue such charges are necessary to offset the costs of protecting and delivering sensitive information, while fintechs counter that the data belongs to consumers and that fees could cripple their business models.
Reuters noted that Visa, for its part, said it is shifting its open-banking focus to regions where adoption has stronger regulatory backing, such as Europe and Latin America. In Europe, regulators mandate banks to provide data access to licensed third parties, creating fertile ground for fintech growth. By contrast, the U.S. is still grappling with a fragmented system based on private agreements.
That landscape may soon change, Reuters noted. The Consumer Financial Protection Bureau last week began rewriting its rules on consumer data rights under Section 1033 of the Dodd-Frank Act, aiming to set clearer standards for how Americans can control the sharing of their financial information between banks and fintechs.