JP Morgan Head of eCommerce Sees Little Threat from “Payments Disruptors”

JP Morgan’s Global Head of eCommerce Solutions, Ron Karpovich, has told CNBC that there is, “more partnership instead of competition,” in payments and that, “Ultimately behind the scenes, (payments disruptors) are going to have to use a bank to move funds.”

He also seemed to dismiss the likelihood that startup competitors would be able to significantly impact market share simply by offering cheaper fees for payments or money transmission:

“When it comes to margins and capabilities — payments is never something that grows in margin…nobody wants to pay for a payment…That’s one of the hardest parts of this process, so you have limited resources in the capability to sell, so you need highly efficient and large players. There’s so much consolidation in the payments space mainly because there’s a requirement to just have good efficiency in your ability to make payments.”

He also said that blockchain will make payments “faster or cheaper,” but will not be foregrounded in user experience:

“…the technology behind the scenes will be blockchain. I don’t know that you will notice anything as a consumer as you continue to use your payment time that you prefer…”

He also clarified that while JP Morgan’s creation of “JPM coin,” a “blockchain” token system for money transfers between institutions may seem like an about-face for the company, the venture is not necessarily an endorsement of regular cryptocurrency use or speculation:

“I think there’s a difference between trading a cryptocurrency that’s in the market that’s ubiquitous versus using the technology to enhance your payments infrastructure. We look at the technology as being a means of doing things faster and cheaper. Every CEO would like to make things faster and cheaper. So from that standpoint I think it represents a buy into the concept of using blockchain…We’ve built a private blockchain capability and put it out to market…”

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