JPMorgan Chase launches a new fee structure that enables encrypted “CRIPPLE” and start -emerging companies, and warns against executives

Under the plan, every time the consumer transmits funds from JPMorgan Chase to the encryption account or a third -party service such as Robinhood, the bank can impose fees on data complexes. Collected encryption companies, such as Plaid or MX, are usually used to access customer accounts in major financial institutions such as JPMorgan Chase. So far, technical banks have not received, but this may change. The complexes are widely expected to cross the new fees to Fintech customers, with some costs to the consumer.

JPMorgan plans to charge the fees make it economically impossible for many consumers to use Stablecoins and Crypto, according to three executives in this field, who refused to speak on the record for fear of revenge. “This would paralyze the encryption industry,” one of the executives said.

Executive officials told luck. One of Fintech has estimated that the access to JPMorgan’s API will be more than the company’s revenue in its presence for 10 years. “This would put everyone out of work … It will require everyone to raise prices by 1000 % to cover (cost),” said the first executive.

Another executive official said: “JPMorgan fees make it impossible to serve customer chasing if you are a small company.”

Alex Ramil, a Public partner At Venture Andressen Horowitz, he said in a After Wednesday JPMorgan plans to ship Fintechs for customer data “not related to a new revenue current. It is related to strangling competition. If they escape from this, each bank will follow.”

“Jpmorgan Chase is a company worth $ 800 billion. The new JPMorgan drawing plan can make it very expensive to invest in Crypto. “If it suddenly costs $ 10 to transfer $ 100 to a Coinbase He said that JPMorgan and other banks can “also refuse to allow consumers to connect their free applications to encryption and technology applications to their bank account” or the Robinhood account, may do fewer people.

JPMorgan said a “calculated step” with her plans to charge the fees. Sethi said in a After Tuesday on x.

“This is not a technical innovation. It is losses,” Sethi said. “Once the data becomes a revenue streaming of the infrastructure provider, the incentive is its division, locking, and selling it with a margin.”

Jpmorgan, the country’s largest bank by assets, 91 million consumer account It spreads through its various sectors. The bank is likely to represent about 20 million accounts in the United States, according to a research note on July 14 from Harshita Rawat, Bernstein Research Analyst.

JPMorgan has already informed the assemblies that it would start imposing fees to access bank account information for its customers. Bloomberg I mentionedBut it is not clear how much the bank is planning to charge.

“We have invested significant resources in creating a valuable and safe system that protects the customer’s data. We have had fruitful talks and work with the entire ecosystem to ensure that we are all invested in the infrastructure that keeps our customers safe,” Jpmorgan Chase said in a statement on Wednesday.

When it comes to the most mature technology such as PayPal and Block, which possesses cash applications, analysts believe that they will not face a significant impact of drawings because they have already negotiated agreements on fees with the largest banks, including JPMorgan “on a multi -faceted basis”, including cards, other relationships, and treatment. “It is possible that PayPal and Block have limited (or management) exposure to the data.” (Synods usually provide technology, such as application programming facades, which allow consumers to link their financial accounts to an application or service.)

Some believe that this positive opinion is premature. The second CEO said that many depend on the size of the fees. “The effect could be very huge,” they said.

Damon is careful of technology

Jimmy Damon, CEO of JPMorgan Chase and the most influential banking in Wall Street, has long had a bleak look at technology. During a analyst in January 2021, Damon said that the current banks should be “”Fear ** less“Among the growing competition formed by Fintechs. Damon said he expects” very difficult competition and very brutal in the next ten years “from Fintechs.

“I expect to win, so God helped me,” Damon said during the call. At that time, Dimon has customized PLAID – a widely used service that quickly helps consumers connect applications like Venmo to their bank account – where there are “people who use data incorrectly for them, like Plaid”.

Damon, in the annual shareholders ’speech that was Published In April, he warned that a battle with third -party complexes was “fermentation”. Demon said in the letter that JPMorgan Chase has no problem sharing customer data, but only if this is done correctly. He said that customers should authorize any participation of their data. They should also know the data that is shared, when and how it is used. “Third parties want full access to the bank customer data so that they can use them for their purposes and profits,” said Damon, who believes that the third parties should pay for access to the banking system and payment bars.

This argument is reinforced through Jpmorgan’s profit call Tuesday. He said that customers have the right to share their information, but there should be a time limit for data. He said that the data should not be renewed or rested to third parties. “Then the batch, it only costs a lot of money to prepare applications programming and such things to manage system protection. So we only think it should be done correctly. This is the main part. It is not as if you cannot do that.”

However, skeptics suspect that consumer protection is the main JPMorgan attention when it comes to technology. Instead, they see the shipping fees for data as a way to large banks to build a trench around their products and services, which makes it difficult for consumers to access competing services, according to executives. “The banks have invested a lot of money to build their offers,” said a third.

Another executive official said that the fees would raise the costs of consumers and limit their financial options while endangering innovation. “This will kill innovation and the choice of the consumer,” said a fourth person.

Complexes like Plaid, Yodlee, Finity and MX will initially feel these changes. Consumers rely on the compounds to share their data and connect their accounts to Fintech applications. Mansouved, for example, has 7000 customers, including Robinhood, Citi, Rocket Mortgage and Shopify. Banks and technology uses PLAID applications to call more than 12,000 financial institutions, including JPMorgan Chase and PayPal.

In 2018, engraved Fell An agreement with JPMorgan allows her to access Cchase customer information through a safe API connection. Since then, Jpmorgan Chase has never received Plaid for consumer data, according to a person familiar with the situation. luck. However, PLAID has costs for security, technology and compliance management associated with maintaining API integration. The person said that JPMorgan also performs customer reviews and dotted them while joining the Plaid network, and is conducting routine safety reviews.

In its contracts with the two compounds, JPMorgan has always reserved the right to impose a data fee, another person familiar with the situation said. The bank also wants to encourage access to more responsible data. Each month, JPMorgan usually receives 2 billion data calls – settlement to access customer data – from the two compounds. But in 90 % of this data, the customer is not actively looking for data.

About three weeks ago, in late June, JPMorgan informed all its collected customers who use their application programming interface who will need to start paying. The person said that the first drawings would start operating at the end of August. The compounds are expected to pass the costs – whatever they are – for consumers.

Other banks are expected to follow JPMorgan. PNC Financial Services, one of the largest consumer banks in the country, is also studying technology fees to access its customer data. “I commend what JP did,” said Bill Demcaak, Chairman and CEO of PNC. Profits Call on Wednesday.

“I think (Jpmorgan) is completely correct. I think there is a great cost to keep this data safe and produce in a form that can be read to our customers. So we, as you know, we are thinking about it.”

The case of other banks is unclear. Citi is one of the largest consumer banks in the country. It has more than 200 million customer accounts worldwide. As of June 2, Bank of America Serve 69 million American companies and consumers. Wales Vargo It is also a large consumer bank, but it does not reveal information about its accounts. Citi refused to comment, while Bofa and Wells were not accessed for comment.

The end of “open banking”?

It is not a coincidence that the change in JPMorgan fees comes because the open CFPB banking base is still unleashed. The law began for the first time during President Trump’s first term. This was completed by the Financial Consumer Protection Office, or CFPB, in October, during the days that retreated from the Biden administration. Open banking base, or Article 1033It is easy for consumers to switch between financial service providers. Banks also require data sharing with other lenders or financial service providers for free. On the same day that the agency issued al -Qaeda, two groups of banking lobby, the Banking Policy Institute and the Kentucky Banking Association, prosecution CFPB, claiming that the regulator has exceeded its authority. (Damon is president From the Institute of Banking Policy.)

CFPB is imposed with consumer protection on the financial market. It is now supervised by the Trump administration, the agency foot He asked for a brief ruling in May, the Kentucky Provincial Court claimed to evacuate the open banking base. CFPB said the rule is “illegal and must be customized,” according to Lift.

“JPMorgan Chase takes advantage of organizational uncertainty to impose” punitive tax on competitive offers. ” “This is a blatant effort to reduce innovation and undermine a stronger American financial system,” Booms said in a statement.

This story was clarified to say that JPMorgan has already informed data complexes that it will start charging the fees to access bank account information to its customers.