Aug 22 (Reuters) - Payments processor Visa has

shuttered its open-banking business in the United States,

according to a source familiar with the matter, as tensions

mount between banks and fintechs over access to customer data.

The unit provides tools to fintechs for easier access to

bank data, helping them offer smoother sign-ups and money

transfers.

However, disputes between banks and fintechs have fueled

doubts about the future of open banking.

A Bloomberg report in July said JPMorgan Chase ( JPM ) had

informed fintechs they would have to pay potentially hefty fees

to access its customer data. PNC Financial CEO Bill

Demchak has also said his bank was considering such a move.

Banks say such fees are necessary to recoup the cost of

safeguarding and delivering customer data, while fintechs argue

that banks should not be allowed to charge for information that

belongs to customers, and the fees would slam their business.

Last month, venture capital giant Andreessen Horowitz's

general partner Alex Rampell likened the fees to "Operation

Chokepoint 3.0", a historical strategy in which regulators

allegedly restricted certain industries' access to financial

services.

"We are focusing our open banking strategy in high-potential

markets like Europe and Latin America," a spokesperson for Visa

said in a statement.

Open banking has gained traction in Europe, where

regulators required banks to share data with licensed third

parties, but the U.S. lacks such rules, leaving adoption to

private agreements.

However, efforts to clarify the framework in the U.S. are

underway. On Thursday, the Consumer Financial Protection Bureau

kicked off a rewrite of its regulations governing consumer

control over the sharing of their personal data between banks

and fintechs.

Visa's closing the U.S. open-banking unit was first reported

by Bloomberg News.

(Reporting by Niket Nishant in Bengaluru; Editing by Devika

Syamnath)