Fintech and crypto industries launch fight to stop banks charging for customer data

By: Yueqi Yang

Translated by: Block unicorn

The fintech industry has turned to the Trump administration for help in trying to block banks led by JPMorgan Chase from charging fintech companies for access to customer banking data.

Under a pricing proposal put forward by JPMorgan, the fintech and crypto sectors could be forced to pay hundreds of millions of dollars to obtain customer bank account information that is currently free. This data allows companies like Venmo and Coinbase to easily accept customer fund transfers, verify bank balances, and review financial history to offer loans.

But JPMorgan CEO Jamie Dimon said during this week's earnings call that building secure systems for data sharing has cost banks "a lot of money." A spokesperson for JPMorgan said the bank is having "productive conversations" with the industry on the issue.

"It’s reasonable for JPMorgan to charge something if they’ve done the work to provide the data," said Ethan Bloch, founder of Hiro, an AI-powered personal finance app. "But if the fees are too high, it could kill or severely damage the entire industry."

Two major fintech trade groups—the Financial Data and Technology Association of North America and the Financial Technology Association—said they’ve met with the Treasury Department in recent weeks, urging regulators to uphold a rule known as the open banking rule. The regulation, issued during the Biden administration, requires banks to allow consumers to share their data with other financial institutions for free.

As part of the lobbying effort, some in the industry pointed to an executive order from President Trump directing federal agencies to phase out paper checks and modernize payments. They argue that allowing banks to charge for customer data would hinder such financial innovation.

The open banking rule stems from a law established after the financial crisis. It grants ownership of bank data to consumers, not banks. This means banks cannot charge fees when consumers wish to share their data with outside firms like PayPal.

The rule was finalized last year, prompting lawsuits from banks attempting to block its implementation. In May, the Trump administration effectively sided with the banks by announcing plans to rescind the rule.

This move only drew widespread attention recently after JPMorgan sent pricing details to some companies outlining charges for accessing bank account data, Bloomberg reported last week. Other banks are expected to follow suit.

The Treasury Department and the Consumer Financial Protection Bureau, which oversees regulation, did not respond to requests for comment.

The crypto industry faces the same fee issue as fintech companies, but its response has been slower due to ongoing congressional discussions around crypto legislation. However, more crypto executives are now speaking out. Kraken co-CEO Dave Ripley posted on X that JPMorgan's fees are "a burden." He added that by charging for data access, "banks can decide who gets to build and what services those builders can offer."

More banks may follow. Industry executives are watching Bank of America and PNC due to their large customer bases and histories. In 2019, PNC blocked Venmo from accessing customer accounts, steering users instead toward Zelle, a payment system owned by banks. During an earnings call on Wednesday, PNC CEO Bill Demchak said the bank is also considering fees and praised JPMorgan's move. Bank of America did not respond to a request for comment.

Plaid and other major data aggregators are now negotiating with JPMorgan over the upcoming fees, which could reach hundreds of millions annually and potentially take effect as early as late summer, according to people familiar with the matter.

Stock prices of companies like PayPal and Block fell following JPMorgan's announcement but have since recovered. There are concerns that data aggregators like Plaid might pass the increased costs on to these platforms.

JPMorgan's pricing plan will likely impose the highest fees on fintech firms focused on payments, Bloomberg reported. This could affect certain crypto companies that need to transfer funds between customer bank accounts. Crypto advocates, including Ben Horowitz, co-founder of a16z, say excessive bank fees for moving money into crypto apps could become a new bottleneck for the industry.

Some in the industry downplayed the potential impact of the fees on their operations. PayPal said the data aggregators it uses to verify customer accounts—such as Plaid, Yodlee, and Finicity, a Mastercard subsidiary—would have to absorb the costs, as PayPal’s contracts with them prohibit fee pass-throughs.

Startups may face greater challenges than larger firms, which have stronger negotiating power. For example, PayPal holds deposits at JPMorgan and is a client of its investment banking division.

Budgeting and investing apps may struggle with these fees. Hiro, for instance, uses users’ financial data—including checking and savings transactions, credit cards, brokerage accounts, and student loans—to deliver personalized advice.

"JPMorgan is the most important bank in America today, and they’re setting the standard for everyone else," said Hiro’s Bloch. "The banking industry will face less competition, and innovation will slow. I find that very disappointing."

The legal battle between banks and the government continues, even though the Trump administration decided to withdraw from the case. The Financial Technology Association has filed a motion to defend the open banking rule, and the Consumer Financial Protection Bureau must file a response by July 29.