Massive API Traffic Sparks Concerns
JPMorgan Chase is preparing to impose new fees on fintech data aggregators like Plaid, following a surge in API traffic that the bank says is overwhelming its systems. In June alone, JPMorgan received 1.89 billion API calls, with only 13% linked to actual customer-initiated transactions, according to an internal memo.
The rest of the requests, reportedly used for product improvement, fraud prevention, or even data resale, are being cited by JPMorgan as unjustified burdens on its infrastructure. These repeated, automated data pulls occur even when users are not actively engaging with their financial apps.
Fees Could Reshape Fintech Connectivity
JPMorgan’s planned fees could begin as early as October and may cost leading aggregators like Plaid up to $300 million annually. The bank argues that the cost of maintaining its systems, coupled with elevated fraud rates associated with aggregator-linked transactions, makes this move necessary.
The bank revealed that ACH transactions processed through aggregators are 69% more likely to result in fraud claims. Last year, $50 million in such claims were linked to these connections, and that figure is expected to triple within five years. One unnamed company—believed to be Plaid—accounted for 1.08 billion API calls in June alone, with just 6% initiated directly by customers.
Regulatory Tensions and Industry Pushback
The announcement comes amid a legal battle over the Biden-era “open banking” rule, which mandated that banks provide free data access to authorized third parties. The rule is now under challenge in court, and a recent CFPB motion supported banking industry efforts to overturn it.
Critics, including venture capitalists and crypto executives, accuse JPMorgan of anti-competitive behavior. However, the bank maintains that it is absorbing rising infrastructure and fraud costs caused by unchecked data access.
In response, Plaid claims JPMorgan’s data misrepresents standard industry practice. The company insists that once a user grants permission, ongoing data pulls are essential for features like overdraft alerts and fraud monitoring. It also emphasized the growing consumer demand for personalized, AI-driven financial tools.
Negotiations Point to New Data Economy
Talks between JPMorgan and data aggregators are ongoing. While tensions are high, both sides reportedly acknowledge the need to “right-size” data volumes. Some aggregators have shown willingness to modify access behavior if free API calls are phased out.
Ultimately, the dispute reflects a broader transition in the fintech sector. Free access to bank data has helped many apps flourish, but rising operational and regulatory pressures may force a shift to a paid access model. The outcome could determine how consumer-facing financial tools evolve — and who foots the bill for innovation.
