The biggest bank in the US, JPMorgan, will begin charging financial technology companies for a typically free service.
JPMorgan Chase has informed fintech companies such as PayPal, Venmo and Coinbase that they will need to begin paying to access their customers’ bank account information, Bloomberg reports.
The companies use the information to make it easier for their customers to send, receive and trade money. JPMorgan is reportedly poised to collect hundreds of millions of dollars in fees for the service.
A spokesperson for the bank told Bloomberg that JPMorgan has invested a significant amount of resources in creating a secure system that protects consumer data.
“We’ve had productive conversations and are working with the entire ecosystem to ensure we’re all making the necessary investments in the infrastructure that keeps our customers safe.”
In his annual letter to shareholders, JPMorgan CEO Jamie Dimon touched on the issue, saying that more guardrails needed to be in place if companies were to continue accessing the banks’ client data.
“Third parties want full access to banks’ customer data so they can exploit it for their own purposes and profits.
Contrary to what you may read, we have no problem with data sharing but only if it is done properly: It must be authorized by the customer – the customer should know exactly what data is shared and when and how it is used; third parties should pay for accessing the banking system and payment rails; third parties should be restricted from using the customers’ data for purposes beyond what the customer authorized, and they should be liable for the risks they create when accessing and using that data. When banks utilize third-party data, they will be, and in most cases already are, subject to these same obligations. Banks provide fantastic services, and it’s time to defend ourselves – in the public realm or in court if need be.”
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