JPMorgan Chase CEO Jamie Dimon is defending the bank’s decision to charge fintech companies like PayPal and Coinbase fees for accessing customer account information. This move has sparked significant backlash.
Dimon’s Justification
During a recent earnings call, Dimon explained the policy change, emphasizing customer protection as the primary reason. He argued that while JPMorgan supports data sharing, it needs to be done responsibly. This includes ensuring customers understand what data is shared, setting time limits on access, and preventing resale to third parties. Dimon also cited the significant costs associated with building and maintaining the secure systems required for data sharing. He insisted the fees aren’t about preventing fintechs from operating, but about doing it “properly.” JPMorgan expects to rake in hundreds of millions of dollars from these fees.
Fintechs Fight Back
The fintech industry is pushing back hard. Alex Rampell, a partner at Andreessen Horowitz and Affirm co-founder, called the move a “strangulation of competition,” arguing that charging fees will make it harder for people to move money into crypto platforms. He warned that if JPMorgan gets away with this, other banks will follow suit, potentially discouraging users from using services like Coinbase and Robinhood.
Arjun Sethi, co-CEO of Kraken, criticized JPMorgan for claiming ownership of data generated by users but stored on the bank’s infrastructure. He advocated for a more open system, urging banks to invest in shared infrastructure rather than just extracting value from it. He argued that focusing on restricting access rather than improving it is not the right approach.