Europe, the Middle East and Africa are hardly a niche market — the
But emerging payment innovations such as real-time processing can improve access to financial services in different markets that are both mature and emerging, JPMorgan Chase executives contend.
"We move $11 trillion in payments globally each day, and we're bringing that scale and philosophy to real-time payments," said Sara Castelhano, co-head of EMEA payments and commerce solutions at JPMorgan Chase Payments.
JPMorgan Chase Payments plans to expand real-time payments in the EMEA region in the coming year. The bank hopes its scale and international network clients and partners position it to compete in a challenging economy in a region with lots of competitors. "Europe is a key growth area for our payments business," Castelhano said, adding JPMorgan Chase Payments is also expanding in new markets outside of Europe such as the United Arab Emirates. The bank is expanding payment technology in the broader region while it reportedly plans to launch a consumer bank in Germany in late 2024 or 2025, according to
While the instant settlement and availability of funds is crucial to a variety of financial products, there's a challenge in getting different real-time payment systems to work together.
"'We have one global platform that supports real-time payments" in the U.S., U.K. and continental Europe, Castelhano said. "As real-time payments expand across local markets we can add more reach for global clients."
Despite various efforts to harmonize, the European payments market remains relatively fragmented, especially in cards and digital payments, where various local solutions operate in the individual markets or sub-regions, according to Zil Bareisis, a senior analyst at Celent.
Even with the right technology, U.S. banks face cultural and other challenges in the region.
"The European regulatory bodies have expressed multiple times their concerns about the dependence on the international payment networks, or as they perceive 'American companies,' and are keen to establish alternatives," Bareisis said.
Sizing up the market
There is ample investment in payments technology across the EMEA region, creating opportunities and fueling competition.
There are more than 20 banks based in continental Europe or the U.K. with market capitalization of more than $17 billion, according to
Fintechs are also taking a greater share of this market. Thirty-two percent of European consumers have moved from traditional banks to fintechs in Europe due to either lower fees or an easier user experience, according to a
"In terms of payment innovation, EMEA can be a tough market," said Alistair Newton, a research vice president at Gartner, noting there's a mix of developed markets and emerging markets across the large and diverse region that EMEA covers.
"In developed markets, there's direct bank payments, credit cards, digital wallets, etc.," Newton said. "So giving another alternative can be a challenge."
Beyond faster payments
As it expands real-time processing in EMEA, JPMorgan Chase is also developing ancillary payment services.
For example, the bank is building products for digital currencies in its Onyx division, which acts as a research and development team for blockchain. The institution is developing cross-border use cases for JPM Coin, JPMorgan's permissioned digital coin system. It is also participating in updates to the ISO 20022 standards, which guide messaging for cross-border payments.
"We own our own acquiring business; it's not outsourced," Castelhano said, adding that the bank centralizes merchant acquiring, banking, payment processing and other tasks in a single relationship.
JPMorgan Chase Payments partners with fintechs with specializations like multicurrency transactions, and recently took a 75% majority ownership stake in Volkswagen Payments, according to Castelhano. That will help the bank develop technology to address the growth of web-connected cars.
JPMorgan Chase Payments recently closed on a 48.5% ownership stake in Viva Wallet, a European cloud-based payments fintech. Viva Wallet's platform offers an array of value-added services to merchants, including a tap-to-pay device, which allows merchants to use smartphones to accept payments without requiring hardware such as a dongle. Tap to Pay has drawn attention from
"Tap to Pay is the connection between the physical world and the digital world," said Ludovic Houri, co-head of EMEA payments and commerce solutions at JPMorgan Payments. "In the future there won't be as much of a difference between [in-store] and e-commerce."
The bank is additionally focusing on products such as virtual accounts, which help businesses reduce overall bank accounts in different markets. "They can have fewer pockets of cash in different regions," Castelhano said.
JPMorgan Chase in the coming year will expand its ability to provide payments for marketplaces and regulated payment facilitators as a provider of multiple payment options.
"We're looking for European customers, not just support for our American customers in the EMEA region," Houri said.
Houri joined JPMorgan Chase in the fall of 2022. In the EMEA region, JPMorgan Chase in the past several months
Forty-eight percent of the EMEA Payments & Commerce division's hires over the past year have been women or or people of color, according to Castelhano, adding that contributes to the bank's diversity, equity and inclusion strategy. "It's another key element to our adding diversity of thought, gender and race."
