SAN FRANCISCO (AP) — Visa Inc. has shut down its open banking business in the United States, according to sources familiar with the matter, a move that highlights the growing regulatory and legal uncertainty surrounding consumer financial data rights. The decision by the payments company to cease operations that provide technology for third parties to access customer data was prompted by a mix of regulatory ambiguity and the potential for new fees for customer information, according to Bank Automation News.
Open banking is a practice that allows consumers to securely share their financial data with third-party apps and services, such as budgeting tools and fintech platforms, with their consent. The U.S. has been debating a national framework for these data rights for years. A key component of this debate is a new rule proposed by the Consumer Financial Protection Bureau (CFPB) under Section 1033 of the Dodd-Frank Act, which would establish a standardized open banking framework and give consumers free access to their data.
However, that rule has recently faced legal challenges. In May, the CFPB itself indicated that it would reconsider and potentially withdraw the rule, acknowledging “clear legal deficiencies” after a lawsuit from major banking groups, according to Payments Dive. The CFPB’s move has created a new round of regulatory uncertainty and has left the industry without a clear path forward.
Visa’s decision also follows a recent announcement by JPMorgan Chase, which separately plans to impose new fees for access to customer data, as reported by Seeking Alpha. While Visa’s move and JPMorgan’s plan are not officially linked, they both reflect the ongoing debate over who owns and who should pay for access to consumer financial data.
A Visa spokesperson told Bloomberg that the company remains focused on its open banking strategy “in high-potential markets like Europe and Latin America,” where regulatory frameworks are more clearly defined. The abandonment of its U.S. business is a setback for the “open banking” movement in the U.S., which advocates for greater competition and innovation in the financial services sector. The lack of a clear regulatory regime for data access has left the door open for incumbents to impose fees and could stifle the growth of new financial technologies, according to analysts cited by Payments Dive.