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JP Morgan To Cannibalize Its Own Card Revenue In Race To Be First On Pay-By-Bank Processing

“If I hear that any of you aren’t sharing information with each other, or you’re hiding information, you’re fired.”

That’s apparently the “wisecracking” line that set the tone for when J.P. Morgan boss Jamie Dimon met with about 15 executives last November. The meeting was about his bank putting together a new payment processing system that would exclude credit card companies and be solely “pay by bank”, according to new revelations by FT.

The project being headed up by the bank’s corporate and investment bank (CIB) poses a formidable threat to companies like Visa and Mastercard, the report notes. So, naturally, the project caused a riff with the bank’s consumer and community banking division (CCB), responsible for $5 billion in card revenues in 2021.

Dimon’s mindset, according to the FT report, was that it was better to “risk existing revenue” than to let another FinTech company beat them to the punch on the technology.

A person familiar with the project told FT: “Jamie wants to understand products that could be threats to banking institutions. If [pay-by-bank] is going to be widely adopted, the bank needs to be there. If long-term it fails, it’s a bit of an insurance policy.”

Dimon reportedly lamented missing out on a mobile payments platform, which was made popular by Square. Now, he has turned his attention to addressing the costly interchange fees charged by credit card companies and loathed by major merchants like Amazon and Walmart.

The meeting last November featured both the head of the bank’s corporate and investment bank and its co-heads of its consumer and community banking division. The goal was to have the CIB implement the technology and the CCB work to clarify consumer protections, the report says.

Takis Georgakopoulos, JPMorgan’s global head of payments for CIB, told FT: “The relationship between the CCB and CIB is as close as it’s ever been. We all know that innovation in payments is one of the firm’s greatest opportunities and we’re committed to it.”

These types of pay-by-bank systems have already become popular in places like the Netherlands and India, the report says. They have not caught on in the U.S. because of slower consumer adoption tied to the fact that ACH payments still take days to clear, instead of seconds.

While Mastercard and Visa don’t seem to worried about the prospects of direct payments just yet, FT notes that they have made acquisitions of FinTech companies like Tink and Finicity to “bolster their ability to facilitate direct transactions”.

Meanwhile, the CIB and the CCB at JP Morgan are still actively collaborating on the project.

Legacy card companies will soon find out exactly how real the threat is: JP Morgan is slated to bring its pay-by-bank system online next year and is already in talks with one FinTech company to provide infrastructure support.

Tyler Durden Mon, 09/26/2022 — 06:55

The View Russia Will Lose War In Ukraine May Be “Naive“

Authored by Bruce Wilds via Advancing Time blog,

The current view being spread by mainstream media in America may be naive. Russia may still win the war in Ukraine. Like most people at times, I’m taken aback and astonished by just how wide opinions and views surrounding a certain event or situation might be. Like many of you just because I wish to listen to diverse views and the people expounding them does not mean I sign onto their ideology or am a fan.

Some of the recent overt speculation in the western press that Putin is sick and on the verge of death or losing power while ignoring the fragility and mental lapses of Biden leads me to discount much of what they are saying.The experience of living for over six months with my ninety-three-year-old mother-in-law that suffers from dementia has given me some insight into the loss of cognitive functioning. This extends to how they think, remember, and reason. It also includes some of the many tricks people use to mask or hide the embarrassment they feel when they lose their ability to remember.

One of the most pronounced methods is to ask general questions such as, how’s the family, or did you have any trouble getting here. These can be used when you don’t even know who you are talking to or where they came from. The fact is that due to changes in the brain, people living with dementia may sometimes experience hallucinations, delusions and/or paranoia. According to Heathman, MD, a Houston psychiatrist, “paranoia, or having false beliefs, is a common trait of later stage dementia.

If you were losing control of yourself wouldn’t you be worried that people would take advantage of you? Still, having a paranoid individual in charge of your country is not necessarily a good thing. This could be one of the reasons Biden appears so obsessed with Trump and those that support him. It also could lead to unnecessary wars under the idea we must take them out before they “get us.” For such a scenario just imagine using information backed by paranoia to justify a first strike on North Korea or Iran.

The last two paragraphs may have moved off topic, this was never intended to be a Biden hit piece. Returning to the crux of this post, I turn to Dr. Jordan Peterson. If there were a “Saying Things People Don’t Want To Hear Award” it would go to Dr. Peterson. He is a professor of psychology at the University of Toronto, a clinical psychologist, and the author of the multi-million copy bestseller 12 Rules for Life: An Antidote to Chaos, #1 for nonfiction in 2018 in the US, Canada, the UK, Australia, New Zealand, Sweden, the Netherlands, Brazil, and Norway.

In the interest of full disclosure, I have never heard of/or read his book. What did catch my eye was an interview on Sky News Australia that lasted just under seven minutes. In the first minute, Peterson comes out swinging. He does this by making the startling statement that there is more than a bit of Hitler in all of us. Not wishing to create a “spoiler alert” for those deciding to watch the short interview it is still fair to call his prediction of Ukraine’s future grave.

Victory Is Often In The Eyes Of The Beholder

Peterson states any notions that the Russians are going to lose the war in Ukraine are “naïve. He then elaborates, “Or that we’re going to win,” he said. “I don’t understand that. What do you mean we’re going to win? What are we going to win here exactly? Dr. Peterson said even if Vladimir Putin allowed Russia to retreat from Ukraine, the country would be left in “smoking ruins.”

For Russia, victory could be declared if they are sucessful in pushing back the advancing borders of NATO. Peterson also delves into the whole idea of totalitarian states. He also points out that America and NATO, if limited by reason, may not be able to respond with nuclear weapons if Putin decides to unleash a “tactical” nuclear weapon. In my opinion such an event could well redefine modern warfare. The Peterson interview can be viewed below:

Peterson keys in on the fact you cannot win against someone you cannot say no to. We sold our soul to Putin for his oil and gas. Putin holds the best cards in that he controls the gas flow into Europe. This winter has the potential to be very very ugly. If anything, I failed to enter the word very enough times in that last sentence.

Tyler Durden Mon, 09/26/2022 — 06:30

Pound Flash Crashes 500 pips To Record Low Amid Global FX Carnage As Things Start Breaking

Just as last week ended, with a relentless meltup in the exponentially rising US dollar, coupled with a collapse in cable, the yen, yuan, euro and so on, not to mention stocks and bonds, so the new week begins only this time the moves are even faster, even more brutal and even more acute, as we approach the breaking point.

Case in point, after starting modestly higher, the meltup in the dollar accelerated, as the Bloomberg dollar index exploded to new all time highs…

… facilitated by a yen whose plunge made a mockery of Thursday’s multi-billion BOJ intervention…

… and is forcing Kuroda to sell even more tens of billions of US Treasurys, to cash into USDs which he will then sell for yen, in the process pushing up 10Y yields even higher, creating a toxic feedback loop of higher yields and an even higher dollar, sending yields higher and the dollar even higher.

But the imminent conclusion of Japan’s MMT experiment notwithstanding, the real highlight of the session so far has been the total collapse in sterling,whose implosion after Friday’s mini budget has accelerated and moments ago cable flash crashed to a new all time low of 1.0350, below the previous record low set in early 1985, and just millimeters away from parity as every single stop was taking out to the downside. .

And since there is nothing at all to contain the now exponential move in the USD, now that the entire world is facing one massive, $20 trillion short squeeze in USD-denominated debt…

Every foreign company or state that has issued USD debt right now pic.twitter.com/ALE3X1nsez
— zerohedge (@zerohedge) September 26, 2022

… expect an emergency central bank meeting this week where panicking officials do everything they can to contain the dollar and to undo the tremendous damage the Powell Fed has unleashed on the world. Because in the end, it’s always the same.

It’s always the same pic.twitter.com/I6cp1FgSWl
— zerohedge (@zerohedge) September 26, 2022

Tyler Durden Mon, 09/26/2022 — 06:24

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