Visa (V) Shuts Down US Open-Banking Unit Amid Regulatory Uncertainty

Visa Inc. (NYSE:V) is one of the best long-term stocks to invest in according to Warren Buffett. On August 22, the company shut down its US open-banking unit. A company spokesperson stated that Visa will now focus its open-banking strategy in high-potential markets like Europe and Latin America.

Visa cited persistent regulatory uncertainties concerning consumer data rights and the likelihood of elevated fees associated with customer information as the reasons for the decision. The unit enabled third parties, including fintech firms, to access banking data and streamline processes for sign-ups and fund transfers.

The US Consumer Financial Protection Bureau (CFPB) had issued a final rule on “Personal Financial Data Rights” that gave Americans the right to share their financial data with third-party providers. However, under the new administration, the CFPB moved to have this rule rescinded and has begun a new process to revise the open-banking regulations. The new rulemaking process is seeking comments on issues such as fees, data security, and data privacy.

Visa will now prioritize high-potential markets like Europe and Latin America, where regulations already require banks to share data with authorized third parties. The decision marks a change from the company’s earlier strategy, which included a $5.3 billion bid for Plaid (ultimately blocked in 2021) and later acquisition of Tink in Sweden for $2 billion to bolster open-banking capabilities.

Visa Inc. (NYSE:V) is a global payments technology company. It operates one of the world’s largest electronic payment networks. The company processes billions of transactions annually through its VisaNet infrastructure and offers products including credit, debit, and prepaid cards.

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Disclosure: None. This article is originally published at Insider Monkey.