Plaid Inc. agreed to pay JPMorgan Chase & Co. for its consumer data, the latest accord in a battle between financial technology firms and banks over who can access the sought-after information.
The largest US bank and Plaid, which connects apps with bank accounts, updated a data-sharing agreement with a set pricing structure, according to people familiar with the matter, who asked not to be identified discussing nonpublic information.
Plaid and JPMorgan confirmed the fees but wouldn’t disclose the amount. In addition to a fee structure, the updated pact includes commitments from both firms “to ensure that consumers can access their data safely, securely, quickly and consistently into the future,” according to a joint statement viewed by Bloomberg.
The two firms already had a data-sharing deal in place that didn’t include fees. Plaid said the updated agreement wouldn’t affect current customer deals and pricing.
“This extended agreement ensures ongoing access for the millions of Chase customers who rely on Plaid every day to connect with the products and services they trust,” Plaid Chief Operating Officer Eric Sager said in the statement.
Banks have expressed concerns for years over potential security issues, liabilities and other expenses as customers have granted fintech platforms permission to access their account data. The issue flared up again in July when JPMorgan began informing aggregators such as Plaid that it would charge for each request — sparking worries about costs, especially for smaller firms.
Read More: JPMorgan Renews Fight With Fintechs for Customer Data
Since then, the US Consumer Financial Protection Bureau has revisited a rule that governs consumer data sharing and originally barred the kind of fees Plaid and JPMorgan are now agreeing to. The agency is accepting public input on how to reshape it.
Banks have already sued to block the CFPB’s open banking rule, which the agency briefly said was “unlawful” and should be vacated by a federal judge in Kentucky. But the CFPB backtracked and reopened the rule for comment following complaints over JPMorgan’s proposed fees from crypto providers and fintech investors close to the White House.
“We’re excited that partnership will continue and the open banking ecosystem will continue to thrive,” Melissa Feldsher, JPMorgan’s head of consumer payments, said in the statement.
The Financial Technology Association, a trade group that Plaid belongs to, is defending the rule in court and supports free data access.
“This agreement establishes continuity,” Freya Petersen, Plaid’s head of corporate affairs, said in a statement. “We still believe consumers should have an unfettered right to access and control their own financial information and will continue to advocate for that.”
JPMorgan is a major player in the data-sharing debate given its scale, particularly among US consumers, and Plaid is one of the best-known data aggregators, serving as the plumbing that connects banks and fintechs.
In the past, the bank has said Plaid and its peers “endlessly” access the bank’s customer data for free and then profit off it by charging others to use it. Others view the charges as an effort to limit innovation and potentially shut out up-and-coming competitors that threaten the bank’s customers.
Litigation Threat
Plaid’s deal with JPMorgan, reached last week, also derailed a lawsuit fintechs were set to file against the bank over the data-access fees, according to people familiar with the matter, who asked for anonymity to discuss legal matters.
The Financial Data and Technology Association of North America was set to file the lawsuit on behalf of its members and is now reconsidering its options, one person said.
In July, JPMorgan and Coinbase Global Inc. reached a deal to directly link customers’ bank accounts to their cryptocurrency wallets.
–By Evan Weinberger and Paige Smith (Bloomberg)






