Plaid has caved into demands by JPMorgan to pay for access to customer data, after the US bank accused aggregator firms of ‘massively taxing’ its systems with unnecessary pings.
JPMorgan sent shock waves through the data aggregation market last month after announcing that it would no longer let fintech companies access it sdata for free.
Of 1.89 billion data requests from middlemen hitting its systems in June, only 13% were initiated by a customer for transactions, according to an internal JPMorgan memo seen by CNBC. The data shows that just 6% of Plaid’s API calls were initiated by customers.
The bank says that the majority as API calls, were for purposes ranging from helping fintech companies improve their products or prevent fraud to other efforts including harvesting data for sale.
The renewed deal with Plaid will preserve access to customer data but at a price that has not been disclosed. JPMorgan is currently negotiating with other vendors amid reports that the pricing fees will vary by use case with firms from the payments sector likely to be charged the most
Plaid says the deal, which extends the existing contract between the two firms, would not impact its current customer agreements and pricing.
“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.”