JPMorgan Chase & Co (JPM.N) has announced its new partnership with France’s Cartes Bancaires (CB), marking a significant move as the first U.S. bank to join the prominent French payments network.
This collaboration aims to reduce card payment costs for JPMorgan’s merchant customers in France.
These customers, including major U.S. companies, will have the opportunity to leverage the CB network for processing payments by the end of 2024, providing an alternative to the services offered by Visa (V.N) and Mastercard (MA.N).
The bank’s goal with this initiative is to “provide competitive transaction costs” for its clients, enhancing the efficiency and affordability of transaction processes.
In scenarios where the CB network is not available for international transactions, CB-branded cards will utilize the Visa or Mastercard networks, adhering to their respective rules and procedures.
This move is particularly beneficial for local transactions in France, where using the Cartes Bancaires network often results in lower costs for merchants compared to other international services.
On February 15, JPMorgan secured a position in Cartes Bancaires’ 12-member governance board, joining major French banks like BNP Paribas (BNPP.PA), Societe Generale (SOGN.PA), and Credit Agricole, with HSBC being the previous sole foreign bank member.
Cartes Bancaires, established 40 years ago, is a key player in France’s financial landscape, handling about two-thirds of daily consumer transactions in the country.
The network boasts approximately 76 million CB cards in circulation and operates 50,000 cash dispensers across France.
The financial industry’s interest in the payments sector is growing, driven by promising revenue projections.
A 2023 McKinsey report forecasts the global payments business to reach $3.2 trillion by 2027, up from $2.2 trillion in 2022.
Banking revenues from this sector are expected to increase to 38% from 36% in the same period, highlighting the lucrative potential for banks and financial institutions engaged in payment processing and services.