JPMorgan has reportedly told FinTechs it will begin charging for access to customer bank info.<\/p>\n
That\u2019s according to a report<\/a> Friday (July 11) from Bloomberg News, which noted these fees from the largest American bank could amount to hundreds of millions of dollars, threatening the FinTech sector\u2019s business model.<\/p>\n The bank has sent pricing sheets to data aggregators<\/a> \u2014 which connect banks and FinTechs \u2014 explaining the new charges, the report said, citing sources familiar with the matter. Those sources say the fees will depend on how the companies use the information, with high prices expected for payments-focused firms.<\/p>\n According to the report, the fees could be levied against the aggregators that connect FinTechs and banks, and pass to the FinTechs and \u2014 eventually, consumers.<\/p>\n A spokesperson for JPMorgan told Bloomberg the bank has invested heavily to develop a system that protects consumer data.<\/p>\n \u201cWe\u2019ve had productive conversations and are working with the entire ecosystem to ensure we\u2019re all making the necessary investments in the infrastructure that keeps our customers safe,\u201d the spokesperson said in a statement.<\/p>\n The fees are expected to go into effect late this year, but aren\u2019t final and could be negotiated, the report added. But the changes would present an upheaval for FinTechs like Coinbase<\/a>, Venmo<\/a> and Robinhood<\/a>, which rely on the ability to access customers\u2019 bank accounts.\u00a0<\/p>\n The report noted that this issue is playing out against the backdrop over the uncertain fate of Section 1033, the so-called \u201copen banking rule.\u201d<\/a><\/p>\n Finalized last year by the Consumer Financial Protection Bureau<\/a> (CFPB), lets access their data, and requires banks to share that data with other lenders or financial services providers for free.<\/p>\n Supporters of the rule say it gives customers greater access to financial services and protects data security. The banking sector contends these changes could bring about fraud and expose them to greater liability.<\/p>\n However, the future of the rule is now up in the air, with the Republican administration asking a federal judge to vacate the rule<\/a>.<\/p>\n As PYMNTS wrote earlier this month, this regulatory uncertainty is one example of the way open banking is proving to be a work in progress<\/a> in the U.S.<\/p>\n