JPMorgan Chase's decision to charge fintechs for accessing customer banking data is a significant blow to the fintech industry, particularly impacting early-stage startups and the crypto sector. Fees could make transactions economically unfeasible for consumers using stablecoins and crypto. Executives predict that startup costs to access JPMorgan's API would far exceed their revenues, forcing price increases of up to 1000%. Industry leaders express concerns that this move not only threatens competition but could set a precedent for other banks to follow suit.
According to four industry executives, the move is a blow to the fintech sector and could prove devastating to early-stage startups, including those in the crypto industry.
One fintech estimated that the fees to access JPMorgan's API would be more than the revenue the company made in its 10-year existence.
Alex Rampell, a general partner at venture firm Andreessen Horowitz, said in a post that JPMorgan's plans to charge fintechs for customer data is about strangling the competition.
The fees are also expected to be onerous for many early-stage fintechs, making it economically impossible for many consumers to use stablecoins and crypto.
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