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Company Claims Regulatory Uncertainties About Consumer Data Rights Motivated Decision to Close Operations in Country.
Visa has decided to close its Open Banking operations in the United States. The decision comes at a time of intense regulatory uncertainty regarding consumer data rights. This information was confirmed by sources close to the matter, who preferred to remain anonymous.
Regulatory Uncertainty Motivates Visa’s Decision
Visa’s action occurs while the future of a crucial rule is at stake. The Consumer Financial Protection Bureau (CFPB) attempted to implement an Open Banking measure. This rule prohibits banks from charging for access to their customers’ data. It requires the free sharing of this information with other creditors or financial service providers. Currently, the regulatory agency is trying to reformulate the rules.
Visa Focuses on Other Markets for Open Banking
In an official response, a Visa spokesperson stated that the company is focusing its strategy on Open Banking “ in high-potential markets like Europe and Latin America“. In July, Visa CEO Ryan McInerney had already highlighted that these markets have the “greatest potential” for the technology.
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The Position of Other Financial Giants
Visa’s decision comes at a delicate moment for the sector. Recently, JPMorgan Chase announced plans to charge fees that could reach hundreds of millions of dollars for access to its customers’ banking information. The news generated a strong reaction among fintechs, who claim they cannot operate without access to this information. A source close to the matter assured that Visa’s decision was made independently of JPMorgan’s strategy.
Change in Visa’s Strategy in Recent Years
This is a significant shift for Visa. Five years ago, the company tried to acquire Plaid, a company that connects bank accounts to fintech applications, for US$ 5.3 billion. The deal was canceled in 2021 after an antitrust review by the U.S. Department of Justice. By the end of that year, Visa acquired Tink, a Swedish competitor to Plaid, for around US$ 2 billion, stating that the partnership would accelerate innovation in Open Banking.
The Legal Dispute and Arguments About the Rule
When the CFPB finalized the rule, banking lobby groups filed lawsuits to block it. They argued that the agreements could foster fraud and increase their members’ liability. On the other hand, advocates of the rule argue that it allows customers to access more financial services, promotes competition, and enhances data security. This week, the CFPB initiated the process to rewrite the rule.
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