JPMC Opens eWallet So Tech Firms Can Offer Virtual Bank Accounts – PYMNTS.com

JPMorgan Chase developed an eWallet product for tech companies like Airbnb, Lyft and Amazon designed to help them provide customers with virtual bank accounts, Bloomberg reported on Wednesday (Nov. 6).
Tech companies benefit by avoiding payment processing fees to third-party vendors whenever customers use their virtual accounts for payments, the report said, while JPMorgan benefits by being the sole payment processing and cash movement firm for tech companies that offer the eWallet to their customers.
“A company’s biggest fear is that once they establish a commerce-type relationship, they can’t maintain the end-user, and they leave the ecosystem because they now have a direct relationship with the seller,” Matt Loos, a managing director in JPMorgan’s global payment strategy and product group, told the news outlet. 
JPMorgan’s wholesale payments sector was responsible for 10 percent of the company’s $109 billion in 2018 revenue, the report noted. 
Over the next five years, banks could lose 15 percent of revenue — an estimated $280 billion — in the payments space due to rivalry from non-banks, according to a September report from Accenture.
“There’s no doubt in my mind that e-commerce platforms are thinking about how to do what you would call traditional retail banking or insurance products more than they did in the past,” Takis Georgakopoulos, who runs wholesale payments for New York-based JPMorgan, said per the report.
China’s Alipay and WeChat, for example, handle payments and cash flow without the need for any banks at all.
“The same way a company like Amazon wants to keep everything under their control, we want to keep as much money movement as possible under our control for each individual client,” Georgakopoulos said.
JPMorgan said it is pursuing eCommerce giants that include Amazon, Uber, Airbnb and eBay.
“We’re talking to all of them,” Georgakopoulos said. “We want the whole industry to use it.”
In a market without open banking regulations, FinTechs continue to enter into the market, collaborating with bank partners to offer their own financial services — which often compete directly with other financial institutions. FinTech startups threaten to take a $280 billion piece of banks’ payment revenue pie by 2025 with their competing services. 
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