Twitter CEO Jack Dorsey testifies during a distant video hearing held by subcommittees of the U.S. House of Representatives Energy and Commerce Committee on “Social Media’s Role in Promoting Extremism and Misinformation” in Washington, U.S., March 25, 2021.
Handout | Via Reuters
Block jumped greater than 5% on Monday, leading a rally in shares of fintech firms as analysts downplayed the specter of JPMorgan Chase’s reported plan to charge data aggregators for access to customer financial information.
The recovery followed steep declines on Friday, after Bloomberg reported that JPMorgan had circulated pricing sheets outlining potential fees for aggregators like Plaid and Yodlee, which connect fintech platforms to users’ bank data.
In a note to clients on Monday, Evercore ISI analysts said the potential latest expenses were “removed from a ‘business model-breaking’ cost increase.”
Along with Block’s rise, PayPal climbed 3.5% on Monday after sliding Friday. Robinhood and Shift4 recorded modest gains.
Broader market momentum helped fuel a number of the rebound. The Nasdaq closed at a record, and crypto rallied, with bitcoin climbing past $123,000. Ether, solana, and other altcoins also gained.
Evercore ISI’s analysts said that even when JPMorgan’s changes were implemented, probably the most immediate effect could be a slight bump in the associated fee of one-time account setups — perhaps 50 to 60 cents.
Morgan Stanley echoed that view, writing that any impact could be “negligible,” especially for giant fintechs that rely more on debit, credit, or stored balances than checking account pulls for transactions.
PayPal doesn’t anticipate much short-term impact, in accordance with an individual with knowledge of the problem. The person, who asked to not be named with a purpose to discuss private financial matters, noted that PayPal relies on aggregators primarily for account verification and already has long-term pricing contracts in place.
While smaller fintechs that depend heavily on automated clearing house (ACH) rails or Open Banking frameworks for onboarding and compliance may face real pressure if the fees take effect, analysts said the larger platforms are largely insulated.
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