Page 17 - GS230101

View

I spoke with recounted working with Chase to launch an
innovative payment solution that never came to fruition Some worry that real-time payments
because of internal struggles. "JPMorgan Chase is a will cannibalize card payments.
highly conflicted bank," said the executive, who requested
anonymity.

I've seen this play out in the past. Back in the 1980s,
executives on the wholesale side of what was then Chase If I've learned one thing in my tenure as payments maven of
Manhattan Bank developed a debit card program that the fourth estate, it's that old payment methods never die;
cleared payments through the ACH instead of the ATM they just make way for newer models. Instant payments
or credit card networks. They convinced what was then will coexist with credit cards and other entrenched
Mobile Oil to add the functionality to its branded credit payment methods. Just as it took years for cards to displace
cards. I had one of those Mobile cards, and loved using the cash and check payments, never quite eliminating either,
debit option; with payments clearing through the ACH I so it will be with instant payments and cards.
benefited from at least two days of float.
Because it is going to take time for instant payments to
The experiment was short-lived, however. I was told at the displace card payments, banks and payments companies
time that the retail side of the bank lobbied successfully to need to strategize now about how to use this window
86 the project, fearing it would eat into the bank's fledgling of opportunity to strengthen their relationships with
POS debit card program. merchants. They should begin thinking of ways to use
real-time payments to their advantage, for example for
According to some reports, JPMorgan Chase's CEO Jamie merchant payouts, and longer-term new use cases for
Dimon told executives on the wholesale and retail sides networks like RTP and FedNow.
of the bank to play nice and get the new solution ready. Patti Murphy is senior editor at the Green Sheet and self-described pay-
I'm not convinced they can. The disconnect between ments maven of the fourth estate. She also co-hosts the Merchant Sales
the wholesale and retail sides of banks is undeniable, Podcast.
especially in large money center banks.