Reforming Retail

To Catch A Predator: JP Morgan Chase

It always cracks us up when people point to banks as the ethical parties because they’re banks.

“Oh, they have so much regulation around what they can and can’t do that they have to behave.”

Bro.

First, the people writing legislation are generally unemployable (right up there with retailers, who are probably their biggest constituents).

Second, nobody understands payments like a payments bro.

Look at this nice, fat rate increase from the too-big-to-fail-thanks-to-government-meddling-in-the-economy bank JP Morgan Chase.

Fortunately, JP Morgan has decided to lift the merchant out of poverty with a literal 20x increase in their credit rates.

‘Tis the season!

This is the best part in our view:

Payments is perfectly hedged to inflation, so there should be no reason to ever increase payment rates.

Think about it: if the merchant increases costs to their customers, the payment processor gets the direct benefit without the need for any customer conversations.

That’s the power of math: if I make a flat percentage of what you make, I will always make more money if you increase your prices.

Your proportional price increase equals my proportional payment EBITDA increase, since payments have no cost.

Thanks to Payment Authorities for the heads up.

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