Payments Systems Are the Future of Fintech

Work from Home Secrets

  • More digitized payment models are going to continue to emerge, JPMorgan analysts estimate
  • “Digital transformation is not a sprint, it’s a marathon, but it also has no finish line,” JPMorgan’s Jeremy Balkin said

JPMorgan Chase is amping up its investments in payment processors, and — according to the global bank’s head of innovation and corporate development — everyone else in the financial services industry should follow suit. 

“Continue to focus on payments, because I think that’s a space that’s borderless,” Jeremy Balkin said at the Mediterranean Business Summit in New York Tuesday.

Earlier this year, JPMorgan moved to acquire around 49% of Athens-based payments services provider Viva Wallet. In 2021, the bank made nearly 20 total investments in the fintech space, including acquiring a 75% stake in Volkswagen Payments, a platform designed for the automotive industry. 

“I think payments…[are] the natural tip of the spear for financial services as it relates to intersecting with the new world of fintech,” Balkin said. “I think it’s the ideal space to collaborate and to build your business models to move money faster, safely, more efficiently.” 

Banks that can custody client assets and be competitive in the landscape are going to be the most successful in coming years, he added. 

JPMorgan analysts estimate tech modernization efforts will top $2.8 billion in 2022, a billion dollar increase from those seen in 2019. This increase in technology infrastructure will lead to more than $5 trillion in payments volume, the bank said in materials released as part of its 2022 investor day.

“Winning in payments is our strategic imperative,” analysts wrote. 

Payments service providers such as PayPal and Block have “done an incredible job penetrating the consumer market,” Balkin said, adding, “the question is what happens in this new environment of interest rates, the cost of capital is not free.” 

Balkin expects ample consolidation in payments in the coming months and years, and the biggest companies are likely going to continue to thrive — akin to Amazon’s rise during the dot-com bubble. 

Digital banking is only going to continue ramping up, Balkin said, meaning the focus on virtual is more important than ever. In 2021, more than 65% of JPMorgan accounts were opened online, analysts said. 

“Digital transformation is not a sprint, it’s a marathon, but it also has no finish line, it’s perpetual, it has to continue,” Balkin said.

Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.

  • Casey Wagner


    Senior Reporter

    Casey Wagner is a New York-based business journalist covering regulation, legislation, digital asset investment firms, market structure, central banks and governments, and CBDCs. Prior to joining Blockworks, she reported on markets at Bloomberg News. She graduated from the University of Virginia with a degree in Media Studies.

    Contact Casey via email at [email protected]

How to Start an Online Business

Leave a Reply

Your email address will not be published. Required fields are marked *