JPMorgan Moves Further Into FinTech

Sebastien Callebaut -

Gearing Up Against Block And Digital Banks

To counter threats from fintech companies like Stripe and Block, JPMorgan Chase has agreed to buy California-based payments startup Renovite. JPMorgan, itself a significant player in the worldwide payments industry, claimed that the acquisition of Renovite will accelerate its roll out of new services to merchants.

  • JPMorgan leads the industry in terms of transaction volume, but fast-rising startups like Stripe and Block have moved up the rankings in recent years as a result of surging e-commerce sales and the rise of new payment options
  • Sellers can accept payments for both offline and online transactions thanks to merchant acquirers, who work in the background and take a small percentage of each sale

On The Defensive

JPMorgan's merchant acquiring revenue stagnated last year in part because it lagged behind in some e-commerce segments and provided fewer services than some fintech competitors. It should be noted that the company still processed more than $9 trillion per day across several businesses.

  • The acquisition of Renovite is the most recent in a line of fintech transactions undertaken under CEO Jamie Dimon
  • In addition to a number of smaller fintech investments, JPMorgan has purchased at least five businesses since late 2020, ranging from an ESG investing platform to a roboadvisor
  • Dimon has often warned about the danger that fintech companies represent to established banks, particularly in the fiercely competitive payments market

Additional Investments

According to people familiar with the matter, JPMorgan is also looking to invest in Yapily, a financial technology company that seeks to raise new capital. Yapili offers a framework for software developers to establish payment services and share data between various financial institutions. According to its website, it collaborates with organisations in the UK, Lithuania, and Germany that are involved in accounting, cryptocurrency, digital banking, and asset management.

  • Any investment would allow JPMorgan to keep up its recent hot streak of partnerships with fintech companies in its push to stave off potential competitors
  • Over the past 18 months, the bank has acquired UK digital wealth management Nutmeg Saving & Investment and purchased a share in the Greek digital banking and payments company Viva Wallet

Disclaimer

Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.

Credits

Photo by Андрей Сизов on Unsplash.