JPMorgan is rolling out a new fintech service called QuickAccept that will challenge companies like Square, PayPal, and Fiserv. Yahoo Finance’s On The Move panel weigh in.
ADAM SHAPIRO: But faster and cheaper, always good if you're looking at an old, what, old 442. But what about fintech? Because JPMorgan has a new program called QuickAccept. It's going to help small business owners. Julia La Roche, this is competition for say PayPal and Square, because it's going to be faster and cheaper than those businesses experience when they use those other platforms, right?
JULIA LA ROCHE: Yeah, it certainly seems that way, and I have to give credit here to CNBC for reporting this that JPMorgan Chase has introduced a new service, and it helps businesses take those credit card payments within minutes through the app or this contactless card reader, which really does take on some of the fintech companies that you were just mentioning. And I took some notes here just on things that I thought were pretty interesting. So at a high level here, if you're a small, medium sized business, managing your cash flow is probably one of the most important areas of focus.
And the article said that one of the challenges was that, you know, sometimes when you are getting these payments processed, it would take anywhere from 24 hours to 72 hours. So really, what they're doing is pulling this, making it, I guess, more faster and cheaper, if you will, and cutting out those fees. They had this one, typically, like Stripe, for example, according to article, you would charge this 1.5% fee, so 150 basis points, to process these payments.
So my guess here is that, you know, JPMorgan's really leveraging its size and scale to be able to deliver these funds immediately while also kind of, you know, taking on some of their fintech competition in the space. It seems like a great way to probably attract customers, bring in new customers, and there's been a lot of activity kind of going on in the payment space. But because of the COVID-19 pandemic, you've really seen a lot of the acceleration here, especially when, you know, you don't necessarily want to go to the physical bank location.
And at the same time, though, from what I understand, folks who do have small, medium sized business, they do like having that relationship with the bank, so I think it's a great play for JPMorgan here. I would watch this space closely. And then one other thing that really stood out to me, I did not know this, but according to the CEO of WePay, which they used that team to come out with the new product here, JPMorgan Chase is the only major bank with a wholly owned payments business, so really kind of leveraging their size here.
RICK NEWMAN: This also raises the question of, is this an existential threat to Square, in particular? I think this is the main thing they do is provide this type of service to small businesses, and then PayPal, you know, so what kind of competition is JPMorgan going to represent, and will other banks get in? They probably will.
This reminds me of when General Motors more than a decade ago looked at what Tesla was doing building electric cars, and they said, well, gee, man, we should get into this business and build electric cars. So Tesla obviously has stayed in business, and the way you do it is you have to hope you can develop some brand loyalty among your customers. You do have to keep innovating. So, you know, Square was our company of the year two years ago, mainly because of the terrific innovation offering to something to small businesses when the big banks really weren't paying them any attention. So I think the pressure is on Square now to figure out how can they take on, you know, the giant banking sector, continue to innovate and somehow find a way to offer better deals to small businesses.