JPMorgan's battle with Viva Wallet may be over, France attracts payments tech

June 19, 2024 10:00 AM

A London judge has issued an order that could lead JPMorgan Chase to sell the Greek fintech, while two large French financial institutions plan to build a processor.

Additionally, ING builds a carbon calculator, Apple Pay adds a large crypto exchange and more.

Here's what's happening around the world.

Chris Ratcliffe/Bloomberg

JPMorgan Chase's battle with Viva Wallet nears a resolution

The London High Court made a ruling in a dispute between JPMorgan and Viva Wallet, potentially opening the way for the bank to sell its stake in the Greek payments company.

The ruling set parameters on Viva Wallet's valuation, according to The Financial Times. Viva Wallet's valuation was a main focus of the battle between JPMorgan and Viva.

JPMorgan in 2022 acquired 48.5% of Viva Wallet, with Viva majority investor WeRealize owning the rest. Viva Wallet's founder, Haris Karonis, sued JPMorgan, alleging the bank was suppressing Viva Wallet's growth by blocking Viva's U.S. expansion. JPMorgan, in its own suit, contended WRL, Viva's holding company, was limiting the bank's contractual rights as an investor.

Under the terms of JPMorgan's investment, the bank can take full control of Viva in June 2025 if the fintech's valuation is below 5 billion euros, or about $5.3 billion. WRL claims that's an incentive for JPMorgan to limit Viva's growth. JPMorgan contends that Karonis fails to realize that fintech valuations have fallen due to higher interest rates.

"As the founder of this business, I am thrilled that Viva will now be properly valued on the basis of its growth strategy in the U.S., reflecting its fair market value," Karonis said in an email statement on the London court ruling.

"Today's judgment is a great outcome for JPM and for Viva, forging a commercial path forward. With a financial stake in the company, we have repeatedly offered ways to help the company expand and succeed. The court has now provided a critical step to move forward with fair and transparent valuations, which could allow Viva to be sold soon, before the fintech M&A market further softens," JPMorgan said in an email. .

The bank initially viewed Viva as a streamlined way to sign up merchants across Europe, a complicated task that can differ from one nation to another across the European Union. Other potential benefits are a path for JPMorgan to offer short-term credit backed by future payment flows, competing with Block and PayPal — which offer similar short-term loans that can usually be funded faster than traditional small-business loans from a bank. — John Adams

French banks seek to build EU payments powerhouse

BNP Paribas and BPCE have partnered to create a joint payment processor that would be France's largest, and also place it among the largest three processors in Europe.

The banks are addressing the fast growth of payments technology in Europe, and will work on products that support mobile payments, e-commerce, real-time payment processing and cross-border transactions.

The new processor will also integrate with card schemes including Cartes Bancaires, EIP/Were, Visa and Mastercard. "Given that the increase in card transactions is exponential, our ambition for this processor is to create a device that is efficient and scalable across all our European locations," said Jean-Laurent Bonnafé, director and CEO of BNP Paribas, in a release.

The French banks are building scale as U.S. banks such as JPMorgan Chase pursue Europe's payments market, which is also popular with PayPal, Stripe and Block. JPMorgan, for example, plans to launch a consumer bank in Germany in late 2024. — John Adams

Stripe updates pitch to French businesses

Stripe is also among the payment companies pursuing a market in France, introducing several new business-focused products.

The payment company later this summer will make French buy now/pay later lender Alma available as a payment method for all Stripe users. Merchants may switch Alma on from the Stripe dashboard, and will exist alongside Apple Pay, PayPal, Alipay and other payment options. Early adopters include La Redoute, a French retailer with about $1 billion in annual revenue.

Other new products include updates to Stripe Terminal, and the introduction of mobile point of sale technology in France. And Stripe has scheduled an expanded partnership with CB, a French payment system that handles over 15 billion transactions a year.

Stripe last week signed a partnership with Accor, a France-based hospitality firm that has clients in more than 110 countries covering more than 40 hotel brands. "France is having an AI renaissance, and that wave of innovation is spreading across more traditional companies," said John Collison, co-founder and president of Stripe, in a release. — John Adams

Bank of England: Digital pound won't need new payment terminals

A Bank of England feasibility study contends existing point of sale devices can support the country's potential central bank digital currency.

The central bank is designing a digital pound under government guidance suggesting that the CBDC needs to be easily deployed. The CBDC should also require little or no investment in new hardware, and support normal payments inside stores. The BofE's research said POS terminals can accept online digital pounds, but accepting offline payments would require upgrades.

"This [proof of concept] demonstrated the technical feasibility of using existing POS hardware to initiate digital pound payments. It was useful in developing the Bank's understanding of the requirements for initiating digital pound payments at POS, both online and offline," the BofE said in a release.

Dozens of central banks are in various stages of developing a CBDC, with concerns including interoperability between different CBDCs and the cost of implementation. In the U.S., some banks have expressed opposition to CBDCs on the grounds that a digital dollar could drain bank deposits. — John Adams

ING matches payments to climate footprint

Amsterdam-based ING Group has collaborated with carbon footprint management company Cogo to develop Footprint Insights, a feature on the bank's mobile app that measures the impact of payments on carbon emissions.

The feature also compares a user's carbon emissions with the average emissions of Dutch residents. About half of the 500,000 users in an ING/Cogo pilot test were able to indicate specific purchases that had a high environmental impact. And more than half of the bank's total consumers said they wanted to be informed about their purchases' carbon impact, and provided information on how to make reductions.

Payment providers have added tools to measure environmental impact in recent years. Adyen and Klarna recently added carbon calculators and Visa and Mastercard have offered carbon calculators for several years as part of broader carbon reduction strategies.

The environmental impact of payment card production has also become a concern, leading to the development of new card manufacturing techniques. — John Adams

Mastercard taps London firm for cloud-based bank tech

Mastercard is expanding an existing partnership with cloud technology firm Thought Machine to develop payments and core banking technology.

The card network is hoping to take advantage of a trend toward financial institutions looking to execute upgrades with shorter and less expensive projects.

Mastercard will target card issuers that are under pressure to digitize their payment operations while centralizing a variety of tasks including account and customer ledger management. "As we expand our partnership with Mastercard, we plan to leverage their global presence and payment expertise to deliver our core banking and payment platforms to banks worldwide," said Paul Taylor, CEO and founder of Thought Machine, in a release.

Banks face a complex set of questions when considering an upgrade of their core processing system. They have a growing number of cloud-based options to mitigate traditional core replacement projects that can take years to complete. At the same time, Mastercard and Visa are both looking for more sources of revenue from their large bases of card issuers as income from card payment fees comes under market and regulatory pressure.

That diversification strategy often involves partnerships with fintechs or financial technology sellers. — John Adams

Apple Pay adds crypto exchange

Dubai-based Bybit, one of the world's largest cryptocurrency exchanges, is offering Apple Pay as a transaction option to buy cryptocurrency.

Bybit will support more than 20 traditional currencies for crypto purchases, and is offering zero transaction fees through the end of June in an effort to build support. Bybit is positioning Apple Pay as a more secure and private way to pay for cryptocurrency at checkout. Consumers will be able to pay via Safari without having to create accounts or enter shipping and billing information. Apple Pay payments are authenticated through Face ID, Touch ID or device passcodes.

"This integration represents a significant leap forward in our commitment to providing seamless, secure and innovative financial solutions to the global market," said Joan Han, sales and marketing director at Bybit, in a release. Apple recently added several new Apple Pay features , including making it easier to access incentive marketing, more options for buy now/pay later lending and expanded Tap to Pay technology. — John Adams

JCB to pilot customized store-checkout app

Tokyo-based international payment network JCB and iMago, a technology consulting firm also based in Tokyo, collaborated with local university students to design an app for retailers that uses Ultra Wide Band (UWB) and Bluetooth Low Energy (BLE) to customize the shopping checkout experience for consumers and ease self-service.

For the Chikazuite-Check project, students gathered consumer research to identify common in-store shopping friction points, then worked with JCB and iMago to develop a prototype app enabling shoppers to pre-register their preferences once for all future shopping trips. Options include loading their preferred payment methods to the app, setting up age-verification for alcohol or tobacco purchases and noting whether shoppers tend to bring their own bag or use a store-provided bag. The app includes prompts for easy store navigation and checkout, with the option to edit preferences on demand.

JCB is exploring patents on some of the project's discoveries, and the network plans to promote its use in Japanese stores in the future. — Kate Fitzgerald