JPMorgan Chase is gearing up to take on the likes of Apple Pay, PayPal, and Stripe by boosting its market share in the global treasury services industry by a goal of 50 percent.
The Financial Times, citing Takis Georgakopoulos, the head of JPMorgan’s new wholesale payments unit, reported the goal is to increase its market share during the next few years by increasing business with foreign multinationals as well as in the eCommerce market. In January JPMorgan merged its business-to-business treasury services and its consumer-to-business merchant services division to create the new unit that will go after the digital payment companies. That has enabled the bank to create an end-to-end payments network for eCommerce players from acceptance to payout.
“This creates the largest wholesale business in the industry,” Georgakopoulos said in the interview. “Realistically, we think we get to 7 percent [market share] in the next few years and double our market share to 10 percent over the long term.” The bank currently has market share of about 5 percent. He thinks the unit will stand out from competitors because it will be able to offer a single payments system that customers can use to accept incoming payments from consumers and make payments to suppliers as well as have the ability to transfer money between accounts. JPMorgan is hoping that will prompt retailers to choose it over PayPal and Stripe.
The focus on growing the business organically is a departure for JPMorgan, which The Financial Times pointed out two years ago mulled a $10 billion bid for Worldpay, the payments company. Today Georgakopolous said the bank is much more focused on making smaller buys like the Wepay deal in 2017, in which JPMorgan paid $300 million for the payments FinTech WePay.
JPMorgan isn’t the only one that is bullish about the market and its opportunities. Investors view treasury services as a high return business for the bank and are supportive of the bank’s growth in that area, Brian Kleinhanzl, an analyst at KBW, said in the report. He did note it remains to been seen how successful JPMorgan will be in growing in that market and how much of an investment it will require.