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Insights and Expertise

We still have plenty to solve such as third-party oversight
and dispute rules for RTP and FedNow. I’ll reserve those
Think of BaaS as the plumbing and for another article and declare, with the confidence of
Arya Stark, BaaS is coming.
embedded banking as the faucet,
while open banking is the meter. As founder of Humboldt Merchant Services, co-founder of Eureka
Payments, and a former executive for such payments innovators as
WePay, a division of JPMorgan Chase, Ken Musante has experience in
all aspects of successful ISO building. He currently provides consulting
The Trump Administration proposed reducing CFPB staff services and expert witness testimony as founder of Napa Payments
by 90 percent from its recent level of nearly 1,800 people. and Consulting, www.napapaymentsandconsulting.com. Contact him
Current CFPB leadership filed a motion to vacate its own at kenm@napapaymentsandconsulting.com, 707-601-7656 or www.
Personal Financial Data Rule. The upshot is the CFBP’s Fi- linkedin.com/in/ken-musante-us.
nal Rule is the opposite of final and is no longer a rule.
BaaS is coming
We are left with an uncertain fate. The CFPB
is still legally bound to enforce Section 1033,
and the right of consumers to access their fi-
nancial data remains (presumably) protected.
The framework and enforcement mecha-
nisms are in limbo until the embattled CFPB
puts forth a definitively final and enforced
regulation.
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During this uncertainty period, new partner-
ships may be forged. JPMorgan’s recent and NAC 2025
new fee structure for data aggregators is one
example. My view is JPMorgan is attempting
to set the rate at which data aggregators may
ATMs Across America
access such data. ATMs Across America
A fair fee will encourage all financial institu-
tions to participate and will still realize the
intent of the Dodd-Frank Act.

These fees will provide a sustainable funding
model for a secure API infrastructure. After www.natmc.org Sponsored by:
all, the banks work hard to build their cus-
tomer base; there needs to be recognition for
that marketing effort and the securing of the
data. While this will increase the costs to fin-
techs, it will not slow the adoption of BaaS.

Banks will need the support of their core plat-
forms to initiate this fee, but they should de- Register Now!
mand this ability from their vendors. BaaS is
evolutionary. Fintechs will seek creative ways
to subsidize data-aggregator fees provided
they are reasonable. Perhaps the data itself
will be valuable enough, or the interchange
on debit transactions.

Whatever the mechanism, BaaS will persist
and flourish. Today, I use one app for my
business and personal needs. I easily transfer
funds to members of my family, between my
own accounts, pay vendors via ACH and ac-
cept payments.
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