JPMorgan Chase, the biggest U.S. bank, is benefiting from its increasingly lucrative sale of payments services on the commercial bank side of its business.
The company said third-quarter revenue from the payments segment rose 13% over the year-earlier period to $4.9 billion, according to an earning press release earlier this month. The quarterly payments income has risen to a new high each quarter of the year. Overall, JPMorgan’s overall revenue rose 3% to $46.4 billion.
The bank sells services that allow corporate and institutional clients to manage their payments globally. That includes commerce software for merchants, as well as services for management of clearing, trade and working capital. For merchants, the bank offers processing services, plus fraud and risk management as well as data and analytics support.
The sale of services to merchants reached $2 trillion in transaction volume 20 days ahead of its pace last year, a JPMorgan spokesperson said by email.
Excluding the impact of equity investments, the bank said third-quarter revenue from the payments segment was up 6%, “driven by higher deposit balances and fee growth, partially offset by deposit margin compression.” A spokesperson didn’t immediately have a comment on what equity investments the bank was referring to in the disclosure.
Last year, revenue from payments services rose 1.5% over 2023 to $18.09 billion, but the annual figure was up 34% from 2022, according to the company’s annual filing with the Securities and Exchange Commission.
During its most recent annual presentation to investors in May, the company said that payments fees have climbed 9% annually over the past five years, on a compound annual growth rate basis, pushing up payments revenue by 11.8%, on the same basis.
