Visa’s Retreat from U.S. Open Banking: What It Signals for the Future of Fintech

In late August, Visa made a move that caught the fintech industry by surprise: the payments giant announced it was shutting down its U.S. open banking business.

For years, Visa had positioned itself as a major player in the open banking ecosystem, investing in data access, connectivity, and consumer-permissioned innovation. Yet, as the regulatory landscape grew more uncertain and the economics of data access have tilted toward higher costs, Visa decided the risks outweighed the rewards.

The decision sent shockwaves through the financial services industry, sparking questions about what comes next for open banking in America and whether the U.S. market will fall behind its global peers.

At its core, open banking is about giving consumers control over their financial data. It enables fintech apps to pull information from bank accounts (with the customer consent) to power services like budgeting tools, faster credit decisions, or real-time account-to-account (A2A) payments.

In Europe, the model has taken root under the Payment Services Directive 2 (PSD2), which mandates that banks provide free access to this data for licensed third parties.

In the U.S., however, the story is not as linear. Banks, regulators, and fintechs have been locked in a tug-of-war over who controls access and who pays for it.

Visa’s U.S. exit comes at a time when that battle is heating up — highlighting just how delicate open banking has become.

Visa’s Calculated Exit

When news of Visa’s retreat first broke, early reports pointed to a mix of regulatory uncertainty and rising costs as the primary drivers.

While under the Biden administration, The Consumer Financial Protection Bureau (CFPB) had finalized rules in late 2024 that aimed to require free data sharing between banks & fintechs. These rules (based on Section 1033 of the Dodd-Frank Act) were touted as landmark milestones for consumer choice & financial innovation.

But the 2025 shift in political leadership brought a different approach. Under new (current) leadership, the CFPB announced it would void those rules and rewrite new ones — leaving the future opaque for open banking in the U.S.

That uncertainty created a difficult operating environment for Visa and other financial institutions.

On top of shifting regulation, large banks like JPMorgan Chase began signaling that they would soon charge fintechs for access to customer data. For years, aggregators (such as Plaid, MX) had pulled this information without direct cost — but the tide was turning. If banks were allowed to levy fees for every connection, the economics of open banking could be dramatically reshaped.

For a firm like Visa that thrives on scale & efficiency, battling between regulators + powerful banks was too high of a price.

Exiting the U.S. market allows Visa to sidestep a costly fight while prioritizing resources in regions where rules are clearer and strategic opportunities more predictable.

Regulatory Shifts and the Unsettled U.S. Landscape

Visa’s move cannot be fully understood without unpacking the regulatory environment.

For years, the U.S. lagged Europe in establishing firm rules for open banking. While PSD2 gave European fintechs a reliable framework, American innovators operated in a gray zone, relying on bilateral agreements with banks and intermediaries.

The CFPB’s 2024 rules were supposed to change that by codifying consumers’ right to share their data freely. The agency’s decision in mid-2025 to abandon those finalized rules and draft a new version introduced more uncertainty than clarity.

Banks seized on the moment to argue that they should be compensated for the costly infrastructure required to provide secure data sharing. However, consumer advocates worried that charging fintechs for access would stifle innovation and hurt everyday people who rely on apps for financial management.

This instability highlights one of the U.S. market’s structural weaknesses: the lack of a unified mandate for open banking.

Unlike Europe, where regulators forced banks to open up, America’s approach has been piecemeal and highly politicized. For global companies making billion-dollar bets, that uncertainty can become a dealbreaker.

Competitive Ripples Across the Ecosystem

Visa’s departure inevitably reshapes the competitive landscape.

Its closest rival, Mastercard, remains committed to U.S. open banking. Mastercard’s 2020 acquisition of Finicity gave it a strong foothold, and the company has since invested heavily in partnerships and developer programs to grow its presence. With Visa stepping back, Mastercard gains an edge in building relationships with fintechs hungry for stable partners.

Meanwhile, data aggregators like Plaid, MX, and Akoya continue to hold dominant positions.

These companies were built to navigate the messy realities of U.S. data connectivity, and they are unlikely to abandon the market. If anything, Visa’s absence may open the door to deeper collaborations between aggregators and Mastercard — or to fintechs themselves consolidating around a smaller number of providers.

Still, the economics of aggregation are changing.

If banks are allowed to impose high fees, even established players will face difficult trade-offs in how to price their services.

For fintech startups, the news is bittersweet. On one hand, Visa’s retreat underscores how challenging the U.S. market has become. On the other, demand for open banking-enabled services shows no signs of fading.

Consumers continue to expect seamless access to their data, and businesses want to leverage real-time financial insights for lending, payments, and embedded finance. In this tension lies opportunity, but also risk.

The next few years will test whether fintechs can adapt — or whether they’ll be forced to scale back.

A Global Reallocation of Resources

Visa’s pivot away from the U.S. is not a retreat from open banking altogether — more of a realignment.

The company has made clear it sees stronger growth potential in Europe and Latin America, where regulation is more predictable and consumer adoption is accelerating.

In Europe, PSD2 and the forthcoming PSD3 have created an environment where banks must provide data access without charging third parties. This framework has spurred innovation in everything from instant credit scoring to open banking payments that bypass traditional card rails.

For Visa, participating in that ecosystem means tapping into a fertile ground for account-to-account (A2A) payment solutions and embedded finance products.

Latin America, while newer to open banking, is also showing promise. Countries like Brazil and Mexico have introduced progressive regulations and seen rapid fintech adoption. With fewer legacy constraints than the U.S., these markets present opportunities for Visa to scale solutions without constant battles over policy or pricing.

By shifting resources globally, Visa is sending a signal: open banking is worth investing in, but only where the playing field is level.

What This Means for the U.S. Market Heading Into 2026

Looking ahead, the implications of Visa’s retreat are significant.

On the regulatory front, the CFPB’s next move will be critical. If the agency finalizes new rules that permit banks to charge substantial fees for data access, the economics of U.S. open banking could be fundamentally undermined.

Fintechs may find themselves squeezed between rising costs and consumer expectations for free services. This could drive consolidation, force price adjustments, or slow innovation altogether.

Yet, the demand side tells a different story.

According to industry estimates, the U.S. open banking market was valued at just over $7B in 2024, with projections suggesting it could grow 5x by 2031. Consumers and businesses alike want tools that give them more control over their financial lives.

That demand won’t disappear, even if the infrastructure to support it becomes more expensive. The question is whether regulators will align policy with consumer interests, OR allow banks to tilt the balance in their favor.

For competitors, the next two years will be decisive.

Mastercard may use the opportunity to entrench itself as the default partner for U.S. open banking, while aggregators will jockey to preserve their role as essential intermediaries.

Smaller fintechs will need to innovate around constraints, perhaps by forging direct partnerships with banks or developing new business models less dependent on raw data connectivity.

For Visa, a future re-entry is not out of the question if the regulatory environment stabilizes and the economics improve.

The Bigger Picture

Visa’s retreat from U.S. open banking is more than a corporate strategy shift — it is a reflection of the broader struggles facing the American fintech ecosystem.

The U.S. prides itself on being an innovation hub, yet its fragmented regulatory system often lags behind global peers.

This dynamic creates both challenges & opportunities: challenges in the form of uncertainty and higher costs — opportunities in the resilience and creativity of fintechs determined to serve consumers better.

As the industry looks toward 2026, the future of open banking in America remains uncertain.

Much depends on the choices regulators make in the coming year and the strategies banks pursue in balancing monetization with consumer access.

For now, Visa’s exit stands as a cautionary tale: even the largest players can be deterred by an unpredictable market.

But it also highlights the enduring demand for open, consumer-centric finance.

That demand will continue to shape innovation, whether through traditional players, nimble fintechs, or future coalitions that find a way to make open banking sustainable in the U.S.