Podcast: JPM connects to French payments network Cartes Bancaires

Whitney McDonald 10:09:05
Music, hello and welcome to The Buzz a bank automation news podcast. This episode of The buzz is brought to you by bank automation summit Europe 2024 which takes place October 7 and eighth in Frankfurt, Germany. This event is tailored to resonate with financial services professionals focused on business optimization through technology and automation learn how to overcome implementation challenges by hearing first hand from C level executives from institutions including JP Morgan, Barclays, Starling bank and more. There’s no better place to get a read on the competition than at Bank automation summit Europe 2024 on October 7 and eighth. Register now at Bank automation summit.com my name is Whitney McDonald and I’m the editor of bank automation News. Today is August 20, 2024 joining me from JP Morgan is Mike lozenov. He is here to discuss his global efforts in the merchant acquiring business at JP Morgan, including tapping into a French network and boosting in store services. Thanks for joining us, Mike

Mike Lozanoff 10:10:01
first. Thanks Whitney, for having me on I’m excited to be here with you today. I have a little bit of unique story. Probably, in this day and age, I started my career out of college with JP Morgan, I guess it was bank one, and there were mergers along the way. And I spent, like, the first 12 years in engineering in our credit card issuing business, you know, from working second shift as a as an operator, to writing code in our card issuing business, and then moved over to our Merchant acquiring team about eight years ago, and now have run a lot of the engineering platforms for our card issuing and merchant acquiring so I got, like, a deep engineering background, but over the last five years, got the chance to run product and engineering for our enterprise business, and then recently, just was elevated to be the global head of merchant services for JP Morgan. So that remit includes leading the strategy and execution and full PNL accountability of our business here that provides merchant acquiring solutions to some of the largest global clients, and then also small businesses through our Chase branch network.

Whitney McDonald 10:11:09
Great. Well, thank you again for being here with your background in engineering and then, of course, leadership as well. You have a great kind of combination of background here that I’m sure helps you with innovation. So before we get into new technology and what you’re focused on right now. Maybe you could tell me a little bit about who you’re leading, what your team is made up of, and kind of give us a little glimpse into what your team looks like.

Mike Lozanoff 10:11:32
Sure, sure. So, you know, we have being a global merchant acquire we have a team that focuses on international markets, and I have a team there focused on on our gear up and Asia. We have teams in the US that are focused on our small business distribution and the solutions there, as well as our enterprise segment, which can be quite complex in enterprise payments, whether you’re selling directly to the largest retailers on the planet or distributing to partners and payment service providers that you know, offer their services as an intermediary. You know you have to manage those relationships, and many of them have relationships with the bank. So quite have to navigate that. Quite complex from time to time, teams focused on commercial sales. So how do we get the product and how we want to sell it? How do we want to price it? We talk to clients about it, a team very much focused on that. And then a team that gets a lot of work these days is focused on our payment networks and government relations. A lot can a lot can happen in this industry and regulation differs by by country and region. And so need to have a team there that also focuses on that. And then obviously, you know, my my comfort in engineering, I have that team as all as well focused. But of late, that’s kind of where I grew up and have a comfort zone. So I’m getting to learn a lot more of the business side, which actually has me really invigorated.

Whitney McDonald 10:12:57
Yeah, I’m sure that there is never a dull moment from the innovation to keeping up with client needs, and then the regulation piece of the puzzle, I’m sure, is just the the cherry on top, trying to bail it absolutely. Um, well, when it comes to what you’re working on, what you’re innovating, maybe you could give us a little insight into what you’re focused on right now. How’s the merchant, acquiring business evolving? What are you focused on? What are the client needs? And how do you kind of innovate around that. What’s the focus?

Mike Lozanoff 10:13:25
No, so we’ve one of the things we’ve been we’re a long standing merchant acquirer, operated under the brand, and many of our clients, you know, still use the brand payment tech. That’s what our contracts still state. And, you know, being a long term processor, you have to reinvent yourself from time to time, and we’ve been doing that now over the last few years, putting a lot of money into the platform and re skinning our offering as a commerce solution. And we have that out there where we’re really going deep into our API and digital channels. Clients need different things in today’s day and age, and how fast they need to get up and operating their. Speed of access to data and giving it to them in a form factor that is more modern has been a big investment area for us. We’re also going into it a little bit deeper into in store payments. We’ve been a strength player in E commerce and, you know, in online and online store recurring payments, but getting deeper as a bank processor in the in store, payments is a big investment for us. There’s there’s still a tremendous amount of spend in store, even though most of us, you know, may shop on our phones, but there’s plenty of things that that chat that way you buy online, pick up in store, and the solutions are quite complicated, and retailers like our brand, so they want to do business with us.

Whitney McDonald 10:14:47
Maybe we could take that idea of being a bank processor a step further. What’s the difference between being a bank processor and a payment processor? What’s the benefit there? I know that you kind of just mentioned you have the client interaction piece. Clients are familiar with the JP Morgan brand, but maybe talk through the differences there and the benefits and why that would be the path that merchant takes. Well,

Mike Lozanoff 10:15:09
I think it’s whether it’s a benefit or how you want to frame it. The thing I think is unique with us is, you know, it’s our brand, our systems, our engineers, our service all running it. We don’t outsource any of that relationship to a third party. We don’t white label someone else’s technology. It’s all us. And I think a little bit that the sales team differentiation there is, right when you have a problem, we stand behind it, and our companies been around for a long time, and will, will weather any storm. So I think one that’s a good point of just trust, right there a trusted name, a trusted brand, and we’re going to put, you know, the firm’s reputation behind anything we put in market. At times, it can also be a tough thing, because the firm reputation or brand can be used against you. So I would like to say payments is a very passionate topic. When companies have any issue, they like to leverage their firm, wide relationship against us, so that there’s always a good side and a bad side to to what you have as a being a processor,

Whitney McDonald 10:16:12
yeah, but I like what you said there about owning the whole journey. You’re not outsourcing any of it. I mean, we do a lot of coverage, and we see all the time, there’s different partnerships. There’s different someone owns this part of the journey. Someone owns this, who owns this part? And if there’s issues with the payment, it can kind of get a little bit messy. So having it all in house allows for that to all be in one place. You know, you’re, you’re responsible for the whole journey. When things are going great, or if there’s a hiccup, you can,
Mike Lozanoff 10:16:41
yeah, absolutely. And it is. It’s a complex thing. I think the the item I’ve, I’ve learned more as I speak with retailers or large clients, is, you know, they aren’t, they aren’t payments experts or transaction experts, right? They just want to run their business. So the more we can bring solutions to them that are, are more comprehensive, is something that they’re they’re listening to. And again, if you have one person or one team to call, and the thing I’ve seen is, what’s kept me at JP Morgan for so long, you know, if there is an issue, we swarm to it and we’ll fix it. And that’s the thing, I think, that’s, you know, also resonates with clients that have a long standing relationships. They know we’ll be there.

Whitney McDonald 10:17:21
Now, speaking of having the the ability to problem solve. You’ve been at JP Morgan a long time. You’ve seen the different, I don’t know, the different innovations come out. You’ve seen how the journey has evolved at JP Morgan, just from being on the different teams that you have been on. But maybe you can talk us through a little bit of some projects that you’ve been involved with as of late. What solutions are you bringing to market? What are you working on? What are you investing in to kind of meet some of that client need Sure.

Mike Lozanoff 10:17:49
Let’s see where to start. I think some of the things that are most interesting lately, we spent a lot of time just keeping up with the regulation and ongoing payment reg. But that’s not the coolest stuff. I think the newer things now are one. I’m excited about how we’ve been digitizing our business and then taking a lot of insights and data assets that we have where we can see one of the other advantages of being a major bank processor. We have a huge consumer set of data. How are all the chase customers that have credit cards or debit cards, spending their money, even if they don’t process with us, we have access to look at these kinds of things and help clients see how they may be comparing their spend against other demographic customers in that same segment. Or the example I like to use is maybe helping small businesses, where we can present them as a comparison tool that, and I think we call client Insights, where we say, let’s say you’re a barber shop and you want to open a second location. Well, where are others spending money in different geographic regions around you? And can even help you understand where you may want to open your next door. These are different things. Things that we’re using to able to use data to help give clients the ability to grow their business. The other one, I see that we’re having to really challenge ourselves about not just being part of the transaction flow, but of the client’s journey. So the more we’re getting able to spend in areas around helping them take other parts of their business, whether that’s payroll and building a payroll service that’s integrated for our small business solution, or giving them something to help them with their Let’s see your subscription client. We’re putting logic in to say we can help manage your subscription billers, that you be your clients, that you bill or your customers, and if they get declined, we will retry on your behalf and do different things to help you not lose that customer. These are things that used to be just, you know, think things that a client would have to manage, or a customer would manage, and now we’re trying to build software on behalf of them.

Whitney McDonald 10:19:57
Now, one of the things that’s interesting, of course, is the idea behind the data. And of course, you guys have a ton of data that you’re collecting. You just talked through that, but being able to tap the data and those insights, like you said, the geography or comparing spending on the consumer side or small business side, that’s something that’s key right now. Are you seeing increased demand for that from the client base right now? Are they using these solutions? Are they tapping something like consumer insights.

Mike Lozanoff 10:20:24
They are, they are, you know, they get, you know, what you always find when you present a new product or a new insight is, like, you get a little bit of, you know, click through interest in the beginning, and then you have to watch it right. What, you know, what I what I think may be next is, hey, that insight is neat, but now I have to turn that insight into an action. Maybe I can inject a loyalty program or a marketing campaign. I think continuing to pull the what’s next? How will it help the business? Is where we’ll continue to innovate, invest.

Whitney McDonald 10:20:53
I think that’s the perfect segue to the next question, which is, what are you focused on right now? I know that you mentioned this is, this is a global business. You have your teams in Europe, you have the teams in us. You have a global business. You’re keeping up with different regulation. You’re keeping up with different payments, rails and networks. What are you focused on right now? What has your attention for? What has had your attention in recent months and in coming months that you’re focused on and prioritizing?

Mike Lozanoff 10:21:22
An interesting one. Maybe I’ll jump internationally for a bit. We, we did announce being a large European processor as well, where one item we’re doing is we’re building connectivity into a French local network called carp on care. We’ll be the first American bank, actually, part of the French banking system, where we’ll be registered and be able to offer that, that card type in directly in France. And I think it’s, you know, it is, think of it as a local debit network of sorts, like we have in the US. They have that in French, and has large spend on it, as it’s very favorable to merchants, as the cost of that payment is quite low. We’re doing that with some of the newest technology that we’ve built. We acquired a company a few years ago that was a cloud switching technology that we’ve now incorporated into our full platform. The company was called renovate, and we’re doing it with that team so it’s a full cloud solution. It’s weaved into our target commerce platform, and we hope to be selling that in 2025 that’s got a quite a bit of work. We’re also taking some of the best assets we’ve got from really trying to stitch in a strong digital onboarding for small businesses. We did a lot of that, and have had that in different places across our our software stack. We’re really trying to get it all into this commerce platform. So taking all the digital assets and making sure, whether you’re small, medium or large, we have one way in to get to our services, the only one that I think is kind of a need. I mentioned this in store piece. So you know, just coming from, you know, a tech background, what I didn’t always realize, and it’s now ruined shopping for me, being part of a merchant acquiring business, because I go in and I look at the terminal and I wonder who the processor is, but that the complexity of what retailers have to deal with, with that physical in store device, their ERP systems and inventory. So the investment we’re kind of making, and you know, our we’re calling it our omni channel investment, where we’re going to start to own the software applications on these terminals that will work natively with our online online interface will help to take a lot of that friction away from clients. So, you know, that’s one I’m extremely excited about we’re probably a year into software development and some of the product development we’ve been talking about at various different conferences, but I see it really going live in 2025 and that’s going to be a new channel for us, because we’ve always distributed merchant acquiring through a lot of those retailers, and they’ll continue to be. Strategic partners of ours, but we’re also tiptoeing into it ourselves to see, you know, can we play in that market as well,

Whitney McDonald 10:24:10
to own yet another piece of that, that whole, the whole value

Mike Lozanoff 10:24:14
chain and that and that headache for clients, how can we continue to take that and see how we can bring that more and more in house?

Whitney McDonald 10:24:21
Yeah. I mean, that definitely makes sense. So you said hopes for that to go live 2025
Mike Lozanoff 10:24:27
That’s right, we’re actively talking to clients now and building a pipeline, but yeah, we’ll really start to get that brought in North America next year.

Whitney McDonald 10:24:38
You’ve been listening to the buzz a bank automation news podcast. Please follow us on LinkedIn, and as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us@bankautomationnews.com for more automation news. You.