JPMorgan joins French payments fray in tie-up with Visa rival

JPMORGAN & Chase will join France’s Cartes Bancaires, giving the payment network more heft to compete with United States rivals Visa and Mastercard.

The Wall Street giant was the first US bank to be approved as a principal member of Cartes Bancaires and is aiming to offer the option to French merchants by the end of the year, according to a statement on Monday (Mar 4).

The move should allow it to provide “competitive transactions costs” for those French clients, the company said. That is because while more than 95 per cent of cards branded with Cartes Bancaires also have the ability to be routed over Visa and Mastercard’s networks, it is typically cheaper for merchants to run those transactions over Cartes Bancaires.

“Joining the Cartes Bancaires network was mainly a demand from our merchant clients, as the use of the network can be cheaper than other card networks,” Ludovic Houri, JPMorgan’s co-head of payments and commerce solutions for Europe, the Middle East and Africa, said. “We wanted a seat at the table, like a European bank, and we want to support the Cartes Bancaires network.”

Created in 1984, the Cartes Bancaires network processes 15 billion transactions every year by card or mobile phone, or more than 65 per cent of regular consumption in France. The network’s principal members include BNP Paribas, Credit Agricole, Societe Generale and HSBC Holdings.

France is not alone in having a domestic payments network. Countries including Belgium, Denmark, Spain and Norway also operate networks of their own, according to the European Card Payment Association.

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“We are now looking, in each European country, which similar payment networks make the most sense for us to join,” Houri said.

Banks have been clamouring to gain a greater foothold in the business of payments across Europe, the Middle East and Africa, where total revenues are expected to reach US$500 billion by 2027, according to McKinsey. Credit cards and domestic transactions provide about half of that revenue in the region, McKinsey found.

Credit Agricole, who’s partnered with Worldline, said in its latest strategic update that it aimed to grow overall revenue from payments by 20 per cent by 2025. BNP Paribas, which reached last year a target initially set for 2025, intends to pursue growth in the segment.  

JPMorgan employs about 900 people in France and the bank has expanded its presence in the country in the years since the United Kingdom voted to leave the European Union. BLOOMBERG