Late last week, on a phone call with reporters, JPMorgan CEO Jamie Dimon launched into a rant about the state of the USA, which Dimon said made him feel embarrassed to be an American. It's likely that Mr Dimon was venting in his capacity as head of the Business Roundtable, a lobby group with 200 members, typically CEOs of large American corporations. Mr Dimon said the Roundtable would prioritise regulatory reform, tax and infrastructure. The real reason for the call was JPMorgan's latest results: "JPMorgan earned $26.5 billion in profit over the past 12 months, the most ever by any major U.S. bank," notes Bloomberg. "While trading results reported Friday were worse than analysts' estimated, second-quarter earnings set a record." Mr Dimon favourably compared India and China to the US: "I was just in France, I was recently in Argentina, I was in Israel, I was in Ireland. We met with the prime minister of India and China. It's amazing to me that every single one of those countries understands that practical policies to promote business and growth is good for the average citizens of those countries, for jobs and wages, and that somehow this great American free enterprise system, we no longer get it." Reporters heard Mr Dimon bang on the table during the call. "After a reporter asked about the health of the bond markets during the last half of June -- a fairly standard question for the normally dry coverage of bank earnings -- Dimon seemed to have had enough. 'Who cares about fixed income trading in the last two weeks of June. I mean seriously?' Dimon, 61, asked." Now that former investment banker Emmanuel Macron is firmly ensconsced in the Elysée Palace, maybe it's time for a US investment banker to enter the White House?
Of course, it's possible that Mr Dimon had seen up close the economic revolution happening in China, which, as a New York Times reporter wrote this weekend, has to be seen with your own eyes to believe it. "Almost everyone in major Chinese cities is using a smartphone to pay for just about everything," Paul Mozur writes. "At restaurants, a waiter will ask if you want to use WeChat or Alipay -- the two smartphone payment options -- before bringing up cash as a third, remote possibility." A friend of Mr Mozur's illustrated the immersive impact of mobile payments. She left her ATM card in the machine and didn't miss it for three weeks, until the bank called to tell her. "Mr. Lim said that according to recent data, Ant Financial and Tencent were set to surpass credit card companies like Visa and Mastercard in total global transactions per day in the coming year. The key is that both companies are able to provide payments on the cheap, partly by allowing smaller vendors to make use of a simple printout of a QR code or their phone, instead of an expensive card reader. A back-end system that stores a record of user accounts, instead of having to communicate with a bank, also keeps costs down."
As we note in Social Media and Banking, it was China's decision to build a firewall around its internet providers that gave birth eventually to Alibaba and Tencent. That sense of a firewall persists, with Alipay and WeChat Pay outside China mostly limited to acceptance for Chinese tourists. That hasn't stopped Alipay from seeking alternatives, and Ant Financial pitched for Moneygram, the world's second-largest money remitter after Western Union. Given US sensibilities about handing over control of key financial infrastructure, the Moneygram deal never looked entirely plausible — along with the fact that Euronet was also in the running. The deal has to be passed by the CFIUS (Committee on Foreign Investments in the United States), and Reuters reports that the two companies did not secure clearance within the mandatory 75-day timeframe, according to Bank Innovation. "That's not a good sign. The fact that the two companies have been forced to refile could mean that the government is closely eying this deal, or that it has clear security concerns--that makes the likelihood of the deal passing somewhat slim, according to sources familiar with the matter."
In the western world, cards are so embedded that it won't be easy to shift to another system. Right? Contactless payments have been often seen as a prelude to tap-and-go with the phone, and contactless has been such a success in the UK that card users are beginning to forget their PIN numbers through lack of use. Telegraph Money reports that UK high street banks are allowing payments to go through even when customers repeatedly enter wrong PIN numbers — and are then allowed to pay using a signature or even without, meaning that banks take on the liability for the transaction. Read the story here.
Finally, to return to a theme playing out in these pages in the last few months, data is set to become a digital asset with certain rights attached to it: witness for instance the imminent arrival of the General Data Protection Regulation in Europe, where citizens will be able to demand that companies delete their data upon request. In China, one entrepreneur is thinking about a new digital bank: a digital data bank that citizens can use to draw value from their own data. "For this reason, I've designed what is potentially the world's first digital data bank," writes Toni Fan. "Users can choose to enter their data into our system in response to a set task -- for example, providing personal information to an online shopping platform or an insurance company. This so-called digital labor earns them credits on their data that, in turn, go to a private account in the digital data bank."
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