Would you buy Quicken for $1.5B? (TWIF 7/13)

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Following the news that the CFPB will no longer enforce its open banking rule, JP Morgan Chase announced that it will charge fintechs and third-party platforms to access user financial data. And where JP Morgan goes, other banks are likely to follow.

Two of the primary use-cases for which fintechs access banking data are (1) sending payments and (2) powering consumer fintech applications with user information, though there are others like bank-switching and ID verification.

In the case of open banking payments, charging per-API call mirrors the costs of other payment methods like ACH, wire, and credit cards, and merchants will most likely bear the costs of open banking payments.

For data-sharing the picture is less clear. TPPs (like Plaid and Finicity) will likely pass on the costs to their fintech customers.

If the fees are nominal (~$0.005 per API call), the increase in costs to fintechs will be minor and they may choose to absorb the costs.
Some fintechs may choose to bill their own customers, either a pass-through of per-call costs or bundled into monthly / annual prices.
It's unlikely that the TPPs will absorb the costs.

What's the right equilibrium for consumers? Should access to your own data be free? It depends on the analogy you use. For consumers, switching your phone number between carriers is free, downloading all your documents from a cloud storage folder is free, sending files is (mostly) free, etc.

But banks have traditionally carried the liability for their user data APIs. It is an odd outcome that banks should be responsible for data breaches that result from trusted third parties accessing their data.

I am a strong believer in costless use of financial data APIs, but the liability costs for data access should sit with the TPP, not the provider.

Please find another week of fintech exits and deep reads below.

(👍👎 Have feedback for us? Let us know. Find me at @nikmilanovic, @twifintech, and @ndm)

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📖 Read of the Week

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☯️ Exits

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🤝 M&A - Fintech

African bank payments platform Stitch*acquiredEfficacy Payments and secured a DCSP license to expand into card acquiring services across South Africa.
The Monad Foundationacquired crypto infrastructure platform Portal to advance its stablecoin and crypto payments strategy.
Quicken’s owner is exploring a sale of the financial software pioneer amid rising investor interest in legacy fintech assets, in a sale that could value the company at more than $1.5 billion.
Alpacaentered the UK and EU markets by acquiring WealthKernel, expanding its global brokerage infrastructure offering.
Ondo Financeagreed to buy SEC-regulated broker Oasis Pro for $1.4 billion to enable tokenized stock offerings in the U.S.
BazaaracquiredKeenu, a digital payments company, to broaden its fintech product suite in Pakistan.
OpenSeaannounced its acquisition of Rally to build a mobile-first, onchain platform as part of a broader product evolution.
Clarity AIbought sustainability-focused fintech Ecolytiq to deepen its ESG insights and impact data offerings.

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🏦 M&A - Banks and Financial Institutions

BPER Bancaincreased its takeover offer for Popolare di Sondrio to €6.39 billion, aiming to strengthen its position as Italy’s third-largest banking group.
Nuvamarallied 4% in response to reports of a potential $1.6 billion acquisition, as investor optimism overrode concerns about Jane Street’s recent stake sale.
Partners Groupacquired a strategic stake in Infinity Fincorp, betting on India’s MSME financing sector as a long-term growth engine.
Private equity firms are targeting Astorg-owned IQ-EQ, a Luxembourg-based fund services company valued at around $5 billion, as consolidation heats up in the financial infrastructure space.
ORIX Corporationagreed to acquire a majority stake in Hilco Global, seeking to expand its global investment footprint in asset management and advisory services.
BlackRockpurchasedElmtree Funds for $7.3 billion, accelerating its push into the growing net lease real estate sector.