JPMorgan says that the Fintech intermediaries as a plaid “massively experiencing” its systems

JPMorgan Chase Said Fintech Intermediaries – Companies that have helped a new generation of financial applications to connect with traditional checks – flood the banks of the bank with unnecessary data requests.

“The aggregators access customer data several times a day, even when the customer does not actively use the application,” wrote an employee of JPMorgan Systems last week in an internal memo at the head of retail payments Melissa Feldsher. “These requests for access massively tax our systems.”

On data requests of 1.89 billion Middlemen, hitting JPMorgan systems in June, only 13% were launched by a client for transactions, according to the memo, which was seen by CNBC.

The majority of data pull -ups, called API calls, went for the purpose of helping fintech companies to improve their products or prevent fraud with other efforts, including harvesting data for sale, said that a person knowing the memo who refused to be identified in the midst of talks between JPMorgan and Fintechs.

JPMORGAN, the largest American bank of assets, is preparing to charge intermediaries with new costs of access to systems which, according to them, are increasingly expensive to maintain. Negotiations between JPMorgan and Fintech intermediaries are underway, but new fees could start in October, people who know the issue said.

The bank’s move could lead to upheavals in the Fintech ecosystem, which has prospered as angagers, including traditional banks connected to Plaid and MX with more recent arrivals. Access to the API has been free for years, which allowed Finch advances to provide accounts with check or trading services at no cost.

The situation changed in May after the consumer financial protection office has filed a request for a banking trial aimed at putting an end to the so-called “open banking” rule.

This rule, finalized by the CFPB of the Biden era in the decreasing months of this administration, obliged banks to provide free data to the authorized parties. A week after the rule, the CEO of JPMorgan, Jamie Dimon, called on bankers to “fight back” against what he said to be unfair regulations.

This month, JPMorgan planned to invoice customer data, reported for the first time by Bloomberg, led to accusations of venture capital investors and the leaders of fintech and cryptography that JPMorgan engaged in “anti-competitive behavior and in search of rents” by setting up remuneration for customer data.

But JPMorgan says that it supports the increase in the costs of maintaining the infrastructure necessary for the volume wave, as well as high fraud complaints linked to payments made in the Fintech ecosystem.

The total volume of API calls received by JPMorgan has more than doubled in the past two years, according to the memo.

Transactions involving the money sent to ACH electronic transactions were 69% more likely to result in fraud complaints if they involved intermediate data, according to the memo.

JPMORGAN has seen around $ 50 million in ACH transactions fraud initiated through aggregators, a figure that the bank plans to triple within 5 years.

Among the 13 fintech companies followed in the bank’s note, more than half of the June activity, with API requests of 1.08 billion, came from a single company. Although companies are not named, CNBC has learned that the largest player represented in the data is plaid.

JPMorgan data show that only 6% of PLAI API calls were launched by customers.

Plaid declared in a press release to CNBC that this figure “distorts the operation of access to data” because all activities start when customers grant authorization to fintech companies when they register for accounts. Of course, many customers do not read the long “general conditions” pages that contain data sharing disclosure before opening new accounts.

“Calling the API of a bank when a user is not present once he has authorized a connection is a standard practice of the industry supported by all large banks so that consumers can obtain critical alerts for overdraft costs or suspicious activity,” Plaid told CNBC.

Plaid also said that the higher JPMorgan fraud allegations among the aggregators were “deceptive”, although this was not developed.

“It is not surprising that the volume of access to data increases in parallel with consumer demand for financial tools which are smarter, faster and more suited to their needs,” said Plaid.

“To be clear, we believe that it is essential that the data sharing ecosystem works for everyone, including consumers, fintech developers and financial institutions – many of which operate the banking services open in their own products,” said the company.

The schedules of the costs offered by JPMorgan could lead to the payment of 300 million dollars of new annual fees, according to a Forbes report.

The other companies followed in the JPMorgan document are much smaller entities; Only four other intermediaries have recorded more than 100 million monthly API calls.

If the rule of the “open bank” of the Biden era is canceled by the courts, the main question is not whether the intermediaries will have to pay for the data, but how much they will have to pay.

The back and forth between JPMorgan and the intermediaries is a private process, overflowing from the public, to reach a new reality acceptable to all.

JPMorgan has had productive conversations with several data aggregators who recognize that they can change the way they get data if they are no longer free, according to a person knowing the negotiations.

“I think the two parties fully recognize that there are things they could do for the volume of good -sized calls,” said this person.