JPMorgan says fintech middlemen like Plaid are ‘massively taxing’ its systems with unnecessary pings

## JPMorgan vs. Fintech: A Battle Over Data and Fees

This article dives into a brewing conflict between JPMorgan Chase and fintech companies, specifically those acting as middlemen to connect financial apps with traditional bank accounts. The core issue revolves around data access, its cost, and the future of “open banking.”

• **Data Overload:** JPMorgan claims fintech middlemen are bombarding its systems with excessive data requests, far exceeding the actual customer-initiated transactions. In June, only 13% of 1.89 billion API calls were transaction-related.
• **Cost Concerns:** JPMorgan is preparing to charge these middlemen new fees for system access, citing the rising costs of maintaining infrastructure and increased fraud linked to fintech transactions.
• **Impact on Fintech:** This move could disrupt the fintech ecosystem, which has relied on free API access to offer services like no-fee checking.
• **Open Banking Debate:** The situation is complicated by the Consumer Financial Protection Bureau’s (CFPB) involvement and a potential legal challenge to the “open banking” rule, which mandated free data access.
• **Fraud Concerns:** JPMorgan highlights a higher incidence of fraud claims associated with transactions involving data middlemen, estimating a $50 million loss that could triple in five years.
• **Plaid’s Role:** Plaid, a major aggregator, is identified as the largest user of JPMorgan’s API, with a significant portion of its data requests not directly initiated by customers. Plaid disputes JPMorgan’s claims.
• **Negotiations and Future:** JPMorgan and the fintech companies are negotiating, with potential fees starting as early as October. The outcome will likely reshape how data is accessed and priced in the financial industry.

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