FinovateSpring 2022: Q&A with JP Morgan’s Ray Nazloomian
At the FinovateSpring 2022 conference in San Francisco, FinTech Futures spoke with Ray Nazloomian, executive director, partnerships at JP Morgan Payments, to get his views on how new technologies and business models are shaping the future of the payments industry.
FinTech Futures: What trends are you noticing in the payments landscape at the moment and what new tech or use cases are you most excited about?
Ray Nazloomian: I think there’s a few trends that are worth getting excited about. Obviously one of them would be real-time payments and real-time experiences. In many countries real-time payment schemes are already available, and many other counties are in the process of building and launching real-time payment schemes. We’re connected to many of those schemes and we’re seeing a lot of clients wanting to deliver a real-time payment experience to their consumers.
The second is APIs. APIs aren’t new – they’ve been around for a long time, but most banks have only started externalising APIs over the last few years. At JP Morgan Payments we now have hundreds of clients using our APIs millions of times a day. But APIs in the treasury and payments environment are still in their early days and I expect thousands more clients adopting them going forward. The other reason APIs are exciting is that they’re a fundamental enabler for innovation, helping connect banks to fintechs, ERP systems, TMS systems, payment gateways, and other systems that our clients use.
The third area which is really exciting is AI, machine learning and data science. If you think about trillions of payments happening around the world every single day, each one of those payments is generating a lot of data. And if you can harness that, you can deliver a lot of great meaningful and actionable insights for clients.
You mentioned real-time payments there, so what new initiatives has JP Morgan been working on in relation to payments, is RTP the big one?
Yes real-time payments is definitely a big theme. We see huge demand for real-time payments right around the world, not just in the US. That’s in Europe. That’s in Latin America. That’s in APAC.
We are one of the largest banks in terms of our footprint. We’re connecting to real-time payment networks in over 50 countries now and last year we processed over 250 million real-time payment transactions. And it’s exciting because not only does it mean that money gets to the recipient within five seconds, but clients can deliver better experiences off the back of that capability.
As an example, let’s say you’ve just been in a car accident and your insurer can instantly send you $50 so you can get a taxi home. Or, let’s say you’re an employee who has just clocked out – rather than waiting two weeks to get your paycheque you can have your earned wages for the day paid instantly so you can pay a big bill that you have coming up. These sorts of real-time experiences can truly transform the experience clients can offer.
Given the current trends, how do you see the payments space evolving into the future?
Payments is changing rapidly as innovation accelerates, and given we operate globally we need to keep track of how payments are evolving in different regions, but there are a few macro themes I’ve personally been seeing.
First would be the proliferation of different types of payments. Initially payments were cheques, then ACH and EFT were introduced, now you’ve also got RTP, you’ve also got digital wallets, you’ve also got push-to-card, you’ve also got crypto. You’ve got all these different forms of accepting and receiving payments. This proliferation of payment types is going to continue and it is going to be important to be able to connect to all these different endpoints all around the globe.
The second key theme I’ve been seeing is this idea of ecosystems around payments. Payments fundamentally enables commerce, but typically corporates are looking to use payments in conjunction with something else or have it integrated or embedded in some software they use in their ecosystem. I think that’s why we’ve seen payments companies starting to create an ecosystem of partners that work well with their platform.
And then the third theme I’ve been noticing is industry-specific payment solutions. Whether it is healthcare, automobility, marketplaces, insurance or any other industry vertical, corporates have very specific payment needs and requirements, hence providers are looking to build industry-specific solutions.