Visa Shifts Open Banking Focus Away From US

Visa shut its open banking business in the U.S., Bloomberg reported Friday (Aug. 22), citing unnamed sources.

The move was also reported Friday by Reuters.

In a statement provided to both media outlets, a Visa spokesperson said, per the reports: “We are focusing our open banking strategy in high-potential markets like Europe and Latin America.”

Both reports noted that the closure of the business came at a time when there is regulatory uncertainty around access to consumers’ banking data and when at least two banks have said they may charge fees for that access.

However, Bloomberg reported that an unnamed source said that JPMorgan Chase’s plan to charge fees for data did not play a role in Visa’s decision.

It was reported in July that JPMorgan told FinTechs it would begin charging for access to customer bank data. Bloomberg reported at the time that the fees could amount to hundreds of millions of dollars and threaten the FinTech sector’s business model.

The Consumer Financial Protection Bureau (CFPB) said Thursday (Aug. 21) that it is seeking comments that will inform its implementation of the open banking rule, Rule 1033. The agency said it is looking for comments and data related to fees, data security and data privacy.

The final rule was announced on Oct. 22, during the Biden administration, and was challenged on the same day by a lawsuit that said the rule jeopardizes the security and privacy of consumer financial data.

After the CFPB’s leadership changed under the Trump administration, the agency told a judge July 29 that it would engage in an “accelerated rulemaking process” to revise the open banking rule. It asked the judge to stay the lawsuit, saying the CFPB’s revision of the rule may eliminate the need for the court to consider the current rule.

PYMNTS reported Friday that the CFPB looks set to entertain different fee models, while fees were barred in the prior rule.

The PYMNTS Intelligence report “Consumer Sentiment About Open Banking Payments” found that while 46% of consumers said they would be “highly willing” to use open banking payments, only 11% had done so.