thinking of buying stock, page-34

anyone else think JP morgan might take a stab @ 1.5/share - 750m?

JPMorgan enters Australian payments as competition heats up

JPMorgan will begin supplying payment terminals and online facilities to its global retailing customers operating in Australia, a sign of the intense competition major banks face supplying these services to multinationals.

The world’s largest bank said this would allow it to collect money faster for customers and integrate services such as cash management and lending.


JP Morgan has done a deal with Quest to enter “merchant acquiring” in Australia where it will compete with major banks for retailers.

Its entry into an area of business banking known as merchant acquiring will see JPMorgan connect retailers directly into payments networks, meaning they will no longer need to use a local bank to process transactions.

JPMorgan declined to name any of its local customers, but they include a handful of large brand fashion and beauty retailers and several major e-commerce platforms. It could expand its customer base to large Australian-headquartered companies with global operations, including big miners.

The new competition comes as the Albanese government has put payment fees front and centre after pledging to ban retailers charging their customers for using their debit cards from the end of next year.

At the same time, the Reserve Bank of Australia is considering restricting how much companies such as Mastercard and Visa can charge retailers, as it awaits new legislative powers to target digital platforms including Apple.

Payment industry sources said the arrival of JPMorgan would be of interest to local lenders strategically, as it could present a potential buyer if a major bank wanted to offload its merchant payment operations.

ANZ announced a $485 million deal with Worldline in 2020 whereby ANZ sold 51 per cent of its acquiring business to the French giant.

Intense competition
JPMorgan customers taking in-store payments will switch to a terminal operated by Quest, a Melbourne-based fintech.

“It is great that someone like JPMorgan is coming into the market to provide more competition, and we are proud it has chosen an Australian company to supply the technology,” said Quest chief executive Jan Mason.


The major banks also face competition from companies such as Stripe and Square, part of Block, and Adyen from the Netherlands, crunching acquiring margins. Commonwealth Bank chief executive Matt Comyn said in August that the bank loses money supplying payment services to retailers.

“The margins on merchant acquiring have been severely reduced in the last six years by competition,” said Lance Blockley, managing director of payments services adviser The Initiatives Group.

“In the online acquiring space, the big four banks had over 90 per cent share six years ago. Today it is around 50 per cent. For physical point of sale, the banks had a share over 80 per cent, and today, maybe more like 60 per cent.

“The level of competition in merchant acquiring has become intense, and it is hard to make money in payments.”

Westpac and ANZ have made supplying payments services to the largest Australian companies, including multinationals, a strategic focus. Westpac has built a new digital platform, known as WestpacOne, to provide real-time data for corporate treasurers across all banking and markets products, including payments, which is set to be fully functional by the end of 2027.

JPMorgan is the largest player in global e-commerce payments, with more than $2 trillion in settled sales a year. “Where JPMorgan is positioning ourselves is to provide the comprehensive banking needs of our clients,” said Bianca Bates, head of payments for JPMorgan in Australia and New Zealand.

“I don’t think it is a direct competitive play [against the big four]. We have our own client base in the market we are in,” she added.