- The business faced difficulties as major banks like JPMorgan and PNC considered charging fintechs significant fees to use their data.
- Visa said it will now focus its open-banking strategy on markets like Europe and Latin America.
Visa has closed its open-banking unit in the United States, a source familiar with the matter told Reuters, underscoring growing tensions between banks and fintech firms over control of customer data. The move signals the challenges of expanding open banking in a market still waiting for clear regulatory guidance.
Visa’s open-banking business provided fintech firms with tools to link to banks, enabling smoother sign-ups and transfers. But the initiative faced headwinds as banks began reconsidering how they share customer information.
In July, Bloomberg reported that JPMorgan Chase planned to charge fintech firms significant fees for access to its data. PNC Financial’s CEO Bill Demchak later said his bank could follow a similar approach.
Banks argue these fees are necessary to recover the cost of securing and delivering sensitive customer information. Fintech firms counter that data belongs to consumers, and charging for access could undermine innovation in digital finance.
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Visa’s Global Focus
Visa confirmed the closure and said it would prioritize markets where open banking shows stronger growth potential. “We are focusing our open banking strategy in high-potential markets like Europe and Latin America,” a spokesperson commented for Reuters.
In Europe, regulators have mandated that banks share customer data with licensed third parties, creating a clear framework for open-banking development. By contrast, the U.S. system relies on private agreements, leaving fintech firms vulnerable to shifting bank policies.
The Consumer Financial Protection Bureau has launched a rewrite of rules governing how consumers control their financial data. While the process could eventually provide clarity, uncertainty remains over how quickly changes will be implemented and how they will affect relationships between banks and fintech firms.
Visa’s retreat highlights the obstacles facing open banking in the U.S. Without binding regulations, disputes over who owns and profits from customer data continue to limit progress.
