Data aggregation continues to gain importance in the financial services world. But what value does it offer? PaymentsJournal sat down with Paul Diegelman, VP of digital payments and data aggregation at Fiserv, and Sarah Grotta, director of the Debit and Alternative Products Advisory Service at Mercator Advisory Group, to delve deeper into the topic. PaymentsJournalHow Consumers and Companies Benefit from Data Aggregation PaymentsJournal How Consumers and Companies Benefit from Data Aggregation PaymentsJournaljQuery(document).ready(function ($){var settings_ap39815405 = { design_skin: "skin-wave" ,autoplay: "off",disable_volume:"default" ,loop:"off" ,cue: "on" ,embedded: "off" ,preload_method:"metadata" ,design_animateplaypause:"off" ,skinwave_dynamicwaves:"off" ,skinwave_enableSpectrum:"off" ,skinwave_enableReflect:"on",settings_backup_type:"full",playfrom:"default",soundcloud_apikey:"" ,skinwave_comments_enable:"off",settings_php_handler:window.ajaxurl,skinwave_wave_mode:"canvas",pcm_data_try_to_generate: "on","pcm_notice": "off","notice_no_media": "on",design_color_bg: "111111",design_color_highlight: "ef6b13",skinwave_wave_mode_canvas_waves_number: "3",skinwave_wave_mode_canvas_waves_padding: "1",skinwave_wave_mode_canvas_reflection_size: "0.25",skinwave_comments_playerid:"39815405",php_retriever:"https://www.paymentsjournal.com/wp-content/plugins/dzs-zoomsounds/soundcloudretriever.php" }; try{ dzsap_init(".ap_idx_84480_4",settings_ap39815405); }catch(err){ console.warn("cannot init player", err); } }); Defining data aggregation Data aggregation, or what Diegelman referred to as “consumer permission financial data aggregation,” can be broken down into two parts: consumer permission and financial data aggregation. The consumer permission component of the definition refers to the fact that in data aggregation, consumers should consent to the process and provide the necessary credentials for their bank. In return, consumers expect security, privacy, transparency in the use of their data, and some form of benefit. The second component, financial data aggregation, consists of the financial data that is pulled—or aggregated— from thousands of sources, including banks, credit unions, credit card platforms, investments, mortgage companies and other payment providers. Aggregators like Fiserv have built what Diegelman referred to as an “underlying set of pipes,” allowing these parties to connect together in a faster process and deliver something of value to consumers. Visa’s $5.3 billion Plaid acquisition Visa’s January 2020 announcement of its $5.3 billion acquisition of third party data aggregator Plaid caused major players in the payments world to focus more of their attention on data aggregation. Though open banking is not mandated in the U.S., there is a growing interest on the part of consumers and small businesses to connect their bank and credit union accounts to a third party app or platform. Data aggregators such as Plaid, MX, Fiserv and others are needed to facilitate this connection and the sharing of information, making it available not only through P2P payment apps like Venmo or Zelle, but also through private label debit cards like GasBuddy and Cumberland Farms, mortgage originators, and some digital-only banks. Visa’s acquisition underscores how important data aggregation has become and reveals the direction it is heading. According to Grotta, Visa’s decision to buy Plaid gives it “a jump start in what is becoming the private sector approach to open banking in the ...