JPMorgan Chase


Elizabeth Warren expertly shuts down Jamie Dimon’s mansplaining 

Elizabeth Warren doesn’t take lip from anyone, especially bankers. Jamie Dimon, the billionaire chairman and CEO of JPMorgan Chase & Co., criticized the Massachusetts Democratic senator Wednesday by questioning her comprehension of the world of finance. Warren fired back with fervor — proving this isn’t her first time dealing with the banks.
Pay reparations to descendants of American slaves!

Why we should continue fighting for reparations?

We seek reparations, not only for slavery but also for the injustices inflicted on black people from segregation and lawlessness by white people with no protection of law by the government. Dead slaves have alive oppressed great great great daughters and sons! Reparations isn’t just about money it’s about making repairs also, institutional, social, cultural, mental, psychological etc, repairs of all kinds in order to improve our condition globally. Yes it is wealth transfer but it’s wealth returning to its rightful owners!

The following companies still in existence today that benefited and was involved in the African Slave Trade

Bank of America found that two of its predecessor banks (Boatman Savings Institution and Southern Bank of St. Louis) had ties to slavery and another predecessor (Bank of Metropolis) accepted slaves as collateral on loans.

Aetna, Inc., the United States’ largest health insurer, sold policies in the 1850s that reimbursed slave owners for financial losses when the enslaved Africans they owned died.

JPMorgan Chase recently admitted their company’s links to slavery. “Today, we are reporting that this research found that, between 1831 and 1865, two of our predecessor banks—Citizens Bank and Canal Bank in Louisiana—accepted approximately 13,000 enslaved individuals as collateral on loans and took ownership of approximately 1,250 of them when the plantation owners defaulted on the loans,” the company wrote in a statement.

CSX used slave labor to construct portions of some U.S. rail lines under the political and legal system that was in place more than a century ago. Two enslaved Africans who the company rented were identified as John Henry and Reuben. The record states, “they were to be returned clothed when they arrived to work for the company.”Individual enslaved Africans cost up to $200 –  the equivalent of $3,800 today -  to rent for a season and CSX took full advantage.

AIG completed the purchase of American General Financial Group, a Houston-based insurer that owns U.S. Life Insurance Company. A U.S. Life policy on an enslaved African living in Kentucky was reprinted in a 1935 article about slave insurance in The American Conservationist magazine. AIG says it has “found documentation indicating” U.S. Life insured enslaved Africans.

Wells Fargo – Georgia Railroad & Banking Company and the Bank of Charleston owned or accepted slaves as collateral. They later became part of Wells Fargo by way of Wachovia. (In the 2000s Wells Fargo targeted blacks for predatory lending.)

Where is the money going to? How will these companies do it? Simple, we want these companies to set up two massive banks, an economic development bank on the west coast and an economic development bank on the east coast, so descendants of African slaves can draw that money to get low interest loans or free money to build businesses and industries throughout the United States! Enough is enough. It is time for these companies to be held accountable for their active role in the African Slave Trade.

To Succeed we must be Unified an act Politically and Legally! This is an issue that all people should take a stand for regardless of Race Classification! This is about Justice, Admission of Wrong Doings and Atonement which will truly aid in Racial Reconciliation!
Bank of America agrees to nearly $17B settlement

The government has reached a $16.65 billion settlement with Bank of America over its role in the sale of mortgage-backed securities in the run-up to the financial crisis, the Justice Department announced Thursday.

The deal calls for the bank, the second-largest in the U.S., to pay a $5 billion cash penalty, another $4.6 billion in remediation payments and provide about $7 billion in relief to struggling homeowners.

The settlement is by far the largest deal the Justice Department has reached with a bank over the 2008 mortgage meltdown. In the last year, JPMorgan Chase & Co. agreed to a $13 billion settlement while Citigroup reached a separate $7 billion deal.

At a news conference, Attorney General Eric Holder said the bank and its Countrywide and Merrill Lynch subsidiaries had “engaged in pervasive schemes to defraud financial institutions and other investors” by misrepresenting the soundness of mortgage-backed securities. The penalties, Holder said, go “far beyond the cost of doing business.”

According to one example laid out by the government, Bank of America knew that a significant number of loans packaged into $850 million in securities were experiencing a marked increase in underwriting defects. Notwithstanding the red flags, the bank sold these residential mortgage-backed securities to federally backed financial institutions, the government said in a 30-page statement of facts that is part of the settlement.

Wells Fargo will now let customers withdraw money using their smartphones
Wells Fargo customers will soon be able to use their smartphones, rather than their cards, to withdraw money from the bank’s ATMs. The company announced that as of Monday next week, it was upgrading all 13,000 of its cash machines across the United States with smartphone functionality, requiring that customers provide only their PIN and an eight-digit code (generated from the Wells Fargo app) to access their accounts. Both Bank of America and JPMorgan Chase also have similar technology in the works, but Wells Fargo’s move makes it the first major bank in the US to roll out cardless cash withdrawals at its ATMs. Read more
Here's how banks can offer credit cards like the Sapphire Reserve with enormous sign-up bonuses and still turn a profit

(Jamie Dimon isn’t sweating a short-term loss on the uber-popular Chase Sapphire Reserve credit card.Reuters)

It’s not often that a CEO will announce a $200 million loss with a hint of pride, much less that they’ll claim they wish the loss was twice as large. 

But that’s exactly what JPMorgan Chase CEO Jamie Dimon did in January while discussing the impact of the company’s insanely popular Chase Sapphire Reserve rewards credit card.

Released last summer, the Sapphire Reserve generated intense interest because of an array of enticing benefits to cardholders, including triple points on travel and dining as well as a gaudy 100,000 point sign-up bonus — worth $1,500 — which the company slashed down to 50,000 points earlier this year.  

“The card was so successful it cost us $200 million, but we expect that to have a good return on it,” he told CNBC. “I wish it was a $400 million loss.”

JPMorgan isn’t the only player in the high-rewards credit card game. American Express has long offered generous sign-up bonuses and travel credits to holders of its Platinum card, as has Citigroup with its Prestige card. 


How can these companies afford to offer such lucrative perks to customers and still make money?

In short: They’re in the long game, and they’re betting that the wealthy clientele who sign up for these type of cards will eventually be worth more than they cost to lure in. They’re also betting that some of them won’t be smart enough to take full advantage of the card. 

That’s according to fresh research from UBS, which interviewed former payments industry executive Kameliya Vladimirova, who explained how the math can add up for these financial behemoths.

She outlines five main factors that combine to make these cards a worthwhile investment for banks: 

•  The client base is wealthy, low-risk, and ripe for offering other services. Some credit card users routinely carry a balance; others pay off their card every month. There’s intense competition for the latter group, who tend to have incomes exceeding $100,000. JPMorgan says the average Sapphire Reserve holder earns more than $180,000 annually. They’ll spend more on their cards and pose little risk for default. Moreover, they may provide new business to the bank by purchasing other financial services.

•  Processing fees. Every time the card is swiped, financial institutions collect a small percentage of the purchase. This is known as the “interchange rate,” and it’s slightly higher for these premier rewards cards — around 2.2%, according to Vladimirova. 

Annual membership fees. Premier rewards cards usually come with a hefty annual price tag. The Sapphire Reserve, Amex Platinum, and Citi Prestige each charge $450 a year, though they also offer travel credits that offset this a bit. 

Despite generally being wealthy and responsible, some customers will end up carrying a balance. Even though the type of customer targeted for these cards doesn’t carry a balance, Vladimirova estimates roughly 20% will do so at some point. They tend to carry higher balances, too — she assumes $5,000, compared with the industry standard of $3,000 — which means the credit card company would generate significant revenue from the interest it charges on that balance. 

• Others will fail to take advantage of the card. Vladimirova estimates that 20% of rewards will go unused. Moreover, she assumes most customers won’t exclusively use the card on purchases that trigger extra points. Travel and dining earns triple points for the Sapphire Reserve, but Vladimirova estimates that will only comprise 40% of purchases. 

By year two, credit card companies expect to turn a profit on the average cardholder, according to Vladimirova. You can see UBS’ hypothetical example of revenues and costs on a high benefit card below. 

(These projections assume only 40% of purchases will trigger triple points, and that 20% of rewards will go unused.UBS)
Two assumptions that could throw off the profitability projections in this example are: 1) that only 40% of the purchases on the card will come from travel and dining, which earns cardholders triple points 2) that 20% of rewards won’t get used.

If either of those projections prove meaningfully off — if, for example, savvy cardholders use the Sapphire Reserve exclusively for travel and dining and put other costs on a separate cash-back credit card — it may take longer for these cards to reach profitability for JPMorgan. 

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Post-Bitcoin Technology Has Geeks, Giants, and Hackers Excited

In late February about 200 executives, coders, and developers gathered in the downtown Brooklyn office of JPMorgan Chase & Co. to hear an all-day pitch for a new industry group called the Enterprise Ethereum Alliance. Ethereum? It’s the ghostly sounding name for a so-called blockchain technology similar to the one that made the digital currency bitcoin possible. Its inventor, Vitalik Buterin, released his software to the world in 2015, not long after dropping out of the University of Waterloo, in Canada. Less than two years later, JPMorgan, BP, Microsoft, International Business Machines, and ING are among the companies in the group experimenting with it.

Buterin didn’t attend the EEA meeting, but he had a video message to deliver. Except the EEA couldn’t get the video to play, because the computer hosting it crashed. As the crowd began to stir, a frozen frame of Buterin’s face came on-screen, then he disappeared. After the tech crew scrambled for 30 minutes, they finally got it to work.

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It’s an apt metaphor for a technology that’s come with enormous promises but suffered setbacks almost from its inception. Last year, hackers stole $60 million worth of ether, the digital currency linked to Ethereum. The heist was a huge black eye—chances are, if you’ve heard about Ethereum, it’s because of the hack. And yet it isn’t dead. The reason: Unlike bitcoin, this blockchain isn’t really about currency. Its advocates think it could be a universally accessible machine for running businesses.

“Ethereum gives you a new way for the computer to interact with the real world and how money moves,” says Emin Gun Sirer, an associate professor of computer science at Cornell University. “It’s potentially a huge game changer whose value has yet to be tapped.”

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Think of Ethereum as a way for people to make agreements and automate enforcement

To understand what the excitement is about, it helps to start with bitcoin, because without it, there would be no blockchain. Previous attempts to create digital money that could be sent as easily as email ran into a problem: How do you guarantee that each virtual dollar is unique, so the sender can’t spend the same cash more than once? For bitcoin, this is solved with blockchain, which is simply an online ledger book that’s distributed on computers around the world. It tracks and verifies every use of bitcoin. To give people an incentive to maintain the blockchain on their machine, it awards a number of new bitcoins to the first computer to verify a transaction. It’s like a banking system that runs itself—but its main use is just letting people move currency from point A to point B.

Ethereum’s ledger does more. It can store fully functioning computer programs called smart contracts: If person A performs job B for company C, it will trigger a payment of D back to A … and so on. As with bitcoin, the ether currency is a lure to get people to lend the system their computing power, and you need it to participate in a contract. Think of Ethereum itself as a way for people to make agreements and automate enforcement, all on a distributed network of computers. Once you can create contracts—which in essence are just operating procedures—you can use them to manage almost any kind of enterprise or organization.

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For example, John Hancock Financial is experimenting with a tailored version of Ethereum to keep track of compliance with know-your-customer and anti-money-laundering regulations in its wealth management unit. Airline industry giant Airbus SE wants to know if its supply chain management can be shifted to a blockchain. Like David Hasselhoff, Ethereum is popular in Germany: Power producer RWE AG and online bank Fidor Bank are investigating ways to integrate it into their businesses.

The 2016 ether theft showed that though Ethereum may be powerful, it’s still new and prone to mishaps. One of the first things people used ether for was to invest in a kind of decentralized venture capital fund built with an Ethereum smart contract. Investors could vote on how the fund’s ether would be used; hackers found a bug in the contract that forced the fund to funnel its ether to them.

After much consternation, there was a vote in the Ethereum community, supported by Buterin, to edit the blockchain’s transaction history so it appeared as if the hack had never occurred. Blockchain purists were so enraged at the idea of fiddling with the ledger, they began supporting an alternative form of Ethereum, which they took to calling Ethereum classic.

Buterin is unapologetic. “In general, the Ethereum community is on board with the notion that we do not have to do things exactly the way that things are done in other crypto communities,” he says. “I did not create Ethereum to let hackers get away with $60 million.”

This is the stuff of passionate debates on Reddit forums, but it may not matter to corporate users, because many of them don’t want to work on the fully public Ethereum blockchain anyway. JPMorgan just released a version of Ethereum known as Quorum. Developers around the world can work with it, but only companies invited to participate will be able to record transactions and contracts on it. The Airbus blockchain would be similarly walled off.

These blockchains would run alongside the main version of Ethereum, which anyone can use. “We’ve built an unstoppable, uncensorable world computer,” says Joe Lubin, founder of ConsenSys, a Brooklyn company that develops blockchain applications, speaking of Ethereum. Andrew Keys, head of global business development for the company, still sees the technology as a grass-roots tool for cutting out intermediaries of all kinds—from law firms to online social networks. “Our digital identity is on Facebook, and Mark’s getting paid,” he says, referring to Facebook Inc. co-founder Mark Zuckerberg. “Instead of them housing that, we’ll have self-sovereign identity with peer-to-peer transactions.” In other words, instead of using Facebook to control who can and can’t see their family photos, people could one day set the rules themselves using smart contracts.

Ethereum is still a long way from that kind of success in either its public or private forms. The public version needs significant upgrades to be able to handle anything like the volume of interactions on the internet today. Ethereum’s leaders, in their response to the hack, offended a substantial part of the blockchain development and programming community, which isn’t that big. On the business side, corporations have to be convinced that they won’t be giving away trade secrets through their use of a ledger shared with other companies. At the same time, they’ll need to keep the technology open enough so that anyone can put their ideas into the same Ethereum ecosystem. “I don’t want to build AOL,” says Amber Baldet, blockchain program lead for JPMorgan. “I want to build the World Wide Web.”

The bottom line: Ethereum could present a whole new way to run a business, but there are some serious kinks to work out.

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MCX technology to live on in Chase Pay

(BI Intelligence)

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JPMorgan Chase has agreed to purchase the payments technology of Merchant Customer Exchange (MCX), the consortium of large merchants, including Walmart, Chili’s and Kohl’s, behind the now-defunct mobile wallet “CurrentC.”

The move is designed to help Chase boost uptick its own mobile wallet, Chase Pay, in two ways:

  • MCX merchants will grow Chase Pay’s merchant footprint. Chase Pay’s website lists only two merchants presently accepting it – Starbucks and Best Buy – squeezing adoption potential significantly. Other merchants, including Walmart, Shell, and Phillips 66, plan to support Chase Pay in the near future. The acquisition could accelerate that integration. And the move could give Chase capabilities to integrate with merchants both within and outside of the conglomerate. The latest play comes the heels of two smaller merchant partnerships that also grew the wallets’ acceptance.
  • It can also give user more reason to use the wallet. In addition to places to pay, customers need good reasons to pay with the wallet — that’s why Apple Pay, Android Pay, and Samsung Pay have failed to catch on despite being accepted at millions of merchants. Chase can tackle the user value proposition head on with MCX’s tools, including offers and discounts that redeem automatically at checkout. Chase’s recent $10 million investment in LevelUp was similarly designed to allow customers to order ahead and pay with Chase Pay — a strong incentive to use the wallet, and one that could encourage habitual usage.

The acquisition offers an unexpected afterlife for MCX. The merchant’s mobile wallet “died” in June 2016, as MCX announced it was indefinitely postponing the rollout of CurrentC due to poor results in a limited trial. Now, the technology is back to help power Chase Pay, which was already seeking out MCX partners specifically. But time will tell whether the bank’s wallet is brought down by the same factors that ended MCX — namely fragmentation and too much focus on aligning its merchants’ competing interests at the expense of the end-user experience.  

Retailers like Starbucks and Dunkin’ Donuts are winning over consumers with their mobile wallets — apps developed by stores to make it easier for their customers to pay, and to deliver valuable perks. 

And these retailer wallets are leading the overall mobile wallets industry, thanks to their ability to rapidly push out innovative features like rewards programs, coupons, mobile order-ahead, and custom marketing.

This may be surprising considering that retailer mobile wallets can be used only at a specific retailer’s locations; in contrast, popular universal mobile wallets like Apple Pay and Samsung Pay can be used at multiple retailers, as long as users are using the necessary smartphones.

Ayoub Aouad, research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on retailer mobile wallets that assesses what makes them so successful and which retailers can most effectively leverage the technology to push sales, traffic, and average ticket size. The report also outlines what makes these mobile wallets attractive, and discusses some of the advancements being made in the payments industry that will affect mobile wallets’ growth rate.

Here are some key takeaways from the report:

  • Retailers with large addressable user bases who are loyal, repeat visitors, will see their mobile wallets continue to be popular with consumers, especially as there continues to be slow merchant adoption of near-field communication (NFC) technology as well as weak offerings by universal mobile wallets like Apple Pay and Samsung Pay.
  • Loyalty programs will be a significant driver in retailer mobile wallet adoption. Companies like Starbucks and Dunkin’ Donuts have been able to leverage their loyalty programs to acquire mobile wallet users, which, in turn, has driven store traffic and conversion rates.
  • By leveraging these programs, sales are expected to grow at a five-year compound annual growth rate of 68%.
  • However, adoption will begin to decelerate as a result of increased competition by 2020. As universal mobile wallet players begin to add effective loyalty programs and coupons to their offerings, adoption for retailer-based mobile wallets is likely to slow down because these offerings are their main marketing points.

In full, the report: 

  • Explains what hurdles universal mobile wallets have faced.
  • Details what features retailers have adopted into their mobile wallets that have been successful  
  • Analyzes the use cases of retailers that have successfully leveraged their mobile wallet offerings to push growth.
  • Identifies how universal mobile wallets will eventually slow growth for retailer-based mobile wallets.

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  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> START A MEMBERSHIP
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