JPMorgan Chase, the biggest bank in America, has been angry for years about being forced to hand over customer data to fintech companies for free. Now its billionaire CEO Jamie Dimon seems to be capitalizing on a moment of deregulation to slap fintechs with new fees, and the coming negotiations will determine how much damage the behemoth inflicts on their businesses. The bank’s aggressive move is a big escalation in the ongoing battle between financial services incumbents and challenger fintechs.
Since the start of the fintech industry, upstarts have needed access to consumers’ bank data to perform basic functions like transferring money and making budgeting recommendations. Data aggregators like Plaid and MX emerged over a decade ago to fill that need. They make software that bridges bank-to-fintech connections and charge the fintechs for the service. Big banks, including JPMorgan Chase, have long given aggregators access to consumer data for free, complying with a Consumer Financial Protection Bureau (CFPB) rule that prohibited banks from charging for it. But in May, amid the Trump administration’s crusade to vastly reduce regulation, the CFPB said it plans to repeal the rule.
Now JPMorgan Chase is essentially telling aggregators: You’ve built a nice business off of our data–now give us our cut. The scary thing for fintechs is the size of the fees. Chase first sent pricing sheets to aggregators earlier this month. While details remain hazy, the prices are steepest for payments-related data transfers and would require leading aggregator Plaid to pay an estimated $300 million a year in new fees, according to a person briefed on the pricing sheet. That’s more than 75% of Plaid’s 2024 revenue. Bloomberg first reported the news of the coming fees.
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Plaid’s head of corporate affairs Freya Petersen and JPMorgan Chase spokesperson Drew Pusateri declined to comment on the size of the fees.
Two fintech executives we spoke with for this article believe it’s fair for JPMorgan Chase to charge something for data access. The data feed has cost the bank “a lot of money” to set up and maintain securely, Jamie Dimon said last week. But the bank’s real costs to create and operate the data connections remain a mystery, as does its method for coming up with the fees’ eye-watering prices.
If the fees don’t come down, they could make popular features uneconomical for fintechs to offer and leave consumers worse off, fintech executives believe. Miranda Margowsky, a spokesperson for the fintech trade organization the Financial Technology Association, says Chase designed the fees “to crush competition, levy a tax on fintech innovation, and cement their power in the marketplace.”
JPMorgan Chase spokesperson Pusateri told us in a statement that the fees are a way to reign in the excessive number of times fintechs are pulling JPMorgan Chase’s customers’ data. “We receive nearly two billion monthly requests for customer data from middlemen, and more than 90 percent of those are unrelated to a consumer using fintech services.” He added that the new fees “will ensure that data is provided only when customers request it.” He also said Chase “explicitly reserves the right to charge for data access in its current agreements with data aggregators.”
Petersen said Plaid has invested heavily to build its data connections, and it provides data “only at the behest of consumers.” She added that the data belongs to consumers, not banks.
Sima Gandhi, a former fintech entrepreneur and early Plaid employee who’s currently a senior advisor at regulatory consulting firm FS Vector, believes that Chase should instead develop a new data strategy that benefits consumers and passes fees on to them. For instance, Chase could create a premium feature and charge people, say, $1 a month for unlimited data sharing, in the same way that Apple charges for data storage. Chase has no plans to do that, Pusateri says.
What will other big banks do if Chase’s new charges take effect? They’ll likely copy Dimon and tack on fees too, rather than sit back and watch their biggest competitor exert more control and create a new revenue line. PNC Bank CEO Bill Demchak has already said he’s considering levying data-access fees as well.
Now aggregators are praying that they can negotiate the fees down. It’s possible that Chase is taking a President Trump-style approach to negotiating, starting high but being willing to go much lower. Allison Beer, the bank’s CEO of Card Services and Connected Commerce, is leading the charge on the negotiations, according to a person familiar with the matter.
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