finsmart-news_admin 
Visa has closed its open-banking business in the United States amid battles over customer-data access that hampered efforts to build a national system for sharing financial information.
The card giant said it will concentrate its open-banking strategy in Europe and Latin America, where regulators forced banks to provide data to licensed third parties. “We are focusing our open banking strategy in high-potential markets like Europe and Latin America,” a Visa spokesperson said in a statement.
The retreat follows a bumpy U.S. rollout for Visa. In 2020, the company tried to acquire data aggregator Plaid for $5.3 billion, but abandoned the deal in early 2021 after the Department of Justice sued to block it on antitrust grounds. Visa later bought Sweden-based Tink for €1.8 billion, giving it direct access to thousands of European banks.
In Europe, the second Payment Services Directive, or PSD2, required lenders to open customer accounts to outside providers starting in 2018. The U.K. went further, creating a dedicated open-banking body that tracks banks’ API performance. Brazil has also built momentum as its central bank says more than 42 million user consents have been logged under its Open Finance framework, alongside billions of instant transactions processed each year through its Pix payments rail.
The United States, by contrast, has no such mandate. Instead, fintech firms must negotiate data-sharing deals with individual banks. Tensions have sharpened in recent months. In July, Bloomberg reported that JPMorgan Chase circulated pricing sheets requiring fintechs to pay fees to access customer data, with some use cases costing as much as $1.25 per new link. PNC Financial chief executive Bill Demchak said his bank was considering a similar approach.
Banks argue the charges cover the cost of safeguarding and delivering data. Fintechs counter that banks are monetising information that belongs to customers. Venture capital firm Andreessen Horowitz’s general partner Alex Rampell compared the strategy to “Operation Chokepoint 3.0,” a reference to a controversial program a decade ago in which regulators allegedly pressured banks to cut off certain industries.
Regulators have taken notice. The Consumer Financial Protection Bureau last year finalised a rule under Section 1033 of the Dodd-Frank Act that would require banks to give customers free access to their data. But the agency’s new leadership has begun rewriting the framework, leaving the industry uncertain about what comes next.
As such, Visa’s decision reflects that the company is betting its European and Latin American investments will deliver more predictable returns than wading into America’s unfinished regulatory fight.
Previous articleKlarna Strikes €1.4 Billion Financing Deal With Santander to Bolster Growth
