JPMorgan Starts Charging Fintechs for Bank Data

JPMorgan has officially put a price tag on customer bank data, signaling the start of what many are calling the “data tariff era.” This move follows JPMorgan CEO Jamie Dimon’s warning in April 2024, where he argued that banks should no longer give away customer information for free to third parties. Now fintechs will have to pay to access bank data, a decision that could generate hundreds of millions of dollars in new revenue for JPMorgan while fundamentally reshaping how fintechs operate. The impact was immediate. On Monday, July 14, Affirm’s shares fell nearly 1 percent, Sezzle slipped 1.3 percent, while PayPal, which is better positioned to absorb these costs, surged 3.5 percent. The shift highlights which fintechs have the scale and resources to survive in a world where bank data is no longer freely accessible.

Why JPMorgan’s Data Tariff Matters

The decision to charge fintechs for data access mirrors tariffs in global trade. Importing bank data now carries a financial cost, which could devastate fintechs operating on tight margins. Plaid, the leading data aggregator connecting fintechs to banks, faces a significant existential threat because JPMorgan serves 80 million customers across retail and commercial banking. If other banks follow JPMorgan’s lead, fintech business models that depend on free or cheap bank data may collapse. Key reasons this move is significant include:

• Direct Hit to Fintech Economics: Reports suggest these fees may exceed the actual value of transactions, turning once-profitable services into loss-making ventures overnight.
  
  

• Potential Industry Consolidation: Smaller fintechs may not be able to absorb the costs, forcing mergers, acquisitions, or outright closures.
  
  

• Competitive Advantage for Larger Players: Bigger fintechs with stronger cash reserves, such as PayPal, may be able to pass costs to consumers or absorb them internally, gaining a market edge.
  
  

• Disruption to Data Aggregators: Companies like Plaid, which rely on connecting multiple fintechs to banks, could lose access or be forced to pay steep fees that make their business model unsustainable.
  
  
  

The Regulatory Fight That Could Shape Open Banking

JPMorgan’s timing is not accidental. The move comes as Rule 1033, the Consumer Financial Protection Bureau’s proposed open banking rule, faces legal uncertainty. Banks have argued that the CFPB exceeded its authority by forcing them to share consumer data with commercial actors, especially given the high costs of maintaining secure data-sharing systems. If Rule 1033 is vacated, banks will have even greater freedom to impose fees, effectively locking fintechs into a new economic reality. Two major risks stand out:

• Inconsistent State and Federal Rules: Plaid CEO Zach Perret has warned that inconsistent regulations could create chaos, with some banks blocking access for applications such as cryptocurrency trading. Without uniform rules, consumers may be forced to switch banks to use specific fintech apps.
  
  

• Slowed Open Banking Adoption: Only 1 in 10 consumers currently use open banking payments. Sharp increases in fees could discourage new adoption, undermining years of fintech innovation.
  
  

  
  

Consumers Will Ultimately Pay the Price

While fintechs are the direct targets of these new fees, consumers are unlikely to escape unscathed. Startups working on razor-thin or negative margins will likely pass costs to users, turning free services into premium offerings. PYMNTS Intelligence reports that consumers are already willing to pay more for faster services, with 27 percent of respondents saying they would pay slightly more for instant transactions and 20 percent willing to pay significantly more. But if costs rise too quickly, smaller fintechs could be forced to exit the market, leaving consumers with fewer choices and less innovation.

Note for the Future 

JPMorgan’s data monetization strategy is more than just a revenue grab. It signals a shift in how banks view their role in the digital economy. Customer information is now treated as a valuable commodity rather than a byproduct of financial services. For fintechs, the free data era is ending. Companies must reassess their unit economics, explore partnerships with larger players, or invest in alternative data strategies to survive. For consumers, higher fees and reduced service quality may become the new normal. And for the financial services industry, consolidation is likely to accelerate as only the biggest fintechs will have the scale to thrive in this new environment.