While Europe’s PSD2 framework has propelled open banking adoption, Visa’s retreat in the U.S. shows how the lack of unified regulation leaves American fintechs at a disadvantage.
Visa has shut down its U.S. open banking unit, citing increasing uncertainty around consumer data rights and escalating tension between local banks and fintech firms over data access fees.
The move occurs as the regulatory environment remains unsettled in the USA. The Consumer Financial Protection Bureau (CFPB) has initiated a rewrite of its open banking regulations to enhance consumer data-sharing rights. The outcome of this regulatory process could determine whether fintech access remains limited or opens up under defined legal standards.
Open banking is a practice of enabling third-party providers to access bank customers’ data (with consent) to offer innovative payment and money management solutions. It allows secure data sharing through APIs, enabling faster, cheaper, and more personalized financial services. By reducing intermediaries, it improves payments, fraud detection, and cross-border transfers, making finance more efficient and accessible.
At present, CFPB’s Open Banking rule prohibits banks and financial institutions from charging fees to consumers or authorized third parties, including fintechs, for accessing or requesting consumer financial data via the required interfaces. However, as the regulator is rewriting the legislation, some banks and industry groups are arguing that fees are necessary to offset the substantial costs of building and supporting secure data-sharing infrastructure.
Major U.S. banks, including JPMorgan Chase and PNC, proposed introducing hefty fees for data access. They defended these charges as necessary to cover the costs of data security and delivery, while fintechs criticized the move, arguing that customers should freely control their data.
While debates go on, Visa’s open banking arm, which had facilitated fintech access to consumer banking data and tools that streamline onboarding and fund transfers, is closing. The payment provider is shifting its focus to regions with clearer regulatory frameworks, such as Europe and Latin America, where open-banking practices are supported by mandated data-sharing rules. This move underscores how essential regulatory clarity is for fintech innovation.
