JPMorgan – Blockchain’s Future Role in Payments and Money Transfers

JPMorgan - Blockchain’s Future Role in Payments and Money Transfers

Blockchain’s role in the cost cutting of money transfers and payments was the topic of a recent interview with Ron Karpovich, Global Head of eCommerce Solutions at JPMorgan. The interview on CNBC’s Squawk Box didn’t focus on one cryptocurrency. Instead, it was a discussion of blockchain as a technology.

Blockchain Powered Payments

When asked when Ron thought crypto would be widely used as a payment method, especially on the internet, he offered an interesting response. “I think ultimately you will find that the technology behind the scenes will be blockchain. I don’t know that you’ll notice anything as a consumer in that space. I think you’ll still continue to use your payment type that you prefer, be that a wallet, be that a card, be that your bank account.”

In other words, Ron doesn’t believe that a specific cryptocurrency will be adopted for payments. Instead, blockchain will be used to improve existing payment methods. Is he right?

It’s too early to tell. However, most people expect a cryptocurrency to be the “winner,” that is the default payment currency on the internet. Few people are talking about improving existing payment methods.

Using Blockchain to Transfer Money

Surprisingly, when asked how blockchain will disrupt the money transfer business, which nets billions every year, Ron replied, “there’s more partnership instead of competition in that space. When it comes to margins and capabilities, payments is never something that grows in margin. Nobody wants to pay for a payment.”

That much is obvious, however, it’s not obvious that banks will be the institutions at the forefront of blockchain money transfers. Instead, many investors feel that a cryptocurrency will be used and banks will lose a significant amount of business.  

Stellar’s World Wire and Ripple’s xRapid are two examples of currencies that promise fast cheap money transfers and although they work with banks, they are not controlled by them.  

Jamie Dimon’s Reversal on Cryptocurrency

One question was about the JPMorgan coin. Specifically, whether Jamie Dimon (CEO of JPMorgan), who has made many disparaging remarks about Bitcoin, had changed his mind about the cryptocurrency. Ron’s answer evaded the question.

“I think there’s a difference between trading a cryptocurrency that’s in the market that’s ubiquitous versus using the technology to enhance your payments infrastructure. We look at the technology as being a means of doing things faster and cheaper. Every CEO would like to make things faster and cheaper.”

A politician’s answer no doubt but it did at least provide proof that even outspoken critics are coming to understand blockchain and how it can benefit their bottom line. If that trend continues it will mean hundreds and eventually thousands of businesses using the technology. That’s the kind of adoption and publicity that crypto needs as it moves towards its potential of becoming the Web 3.0.

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