JP Morgan advances payment innovation with programmable payments, blockchain and AI

In an evolving global payments landscape, JP Morgan seeks to be at the forefront of innovation, using technologies like blockchain, programmable payments, and artificial intelligence (AI) to provide more efficient solutions for multinational corporations. During an indepth conversation with senior executives, Max Neukirchen, Madhav Kalyan, Alan Lin, and Lillian Sim, outlined how these advancements are impacting liquidity management, cross-border payments, and treasury services for clients across industries, with a special focus on Asia Pacific.

Enhancing liquidity for corporates

Max Neukirchen, global co-head of payments, introduced JPM Coin as a groundbreaking tool for real-time liquidity management. “JPM Coin allows clients to move liquidity around the clock, particularly outside of traditional banking hours,” he said. JPM Coin has become a crucial solution for multinational corporations managing cash flows across different time zones and regions.

According to Madhav Kalyan, head of payments for Asia Pacific, clients are already using JPM Coin to centralise liquidity. "JPM Coin supports nine funding locations and USD and EUR, reducing idle balances and improving cash concentration," he explained. He emphasised that JPM Coin offers significant advantages in enabling real-time liquidity, even during weekends and holidays, allowing companies to manage cash more effectively.

JPM Coin is built on JP Morgan’s blockchain platform, Onyx, which provides seamless integration for these real-time payments. Neukirchen noted, “Onyx has been instrumental in supporting JPM Coin’s ability to settle transactions almost instantly, streamlining payments for companies that operate in multiple jurisdictions.”

Since its launch, $1 billion in daily transactions has been processed using JPM Coin. The network now spans more than 30 countries, serving multinational clients like Siemens and FedEx, making it a critical solution for these companies with extensive cross-border operations. JP Morgan claims to process nearly $10 trillion in payments daily across over 120 currencies, in more than 170 countries. Meanwhile, the global cross-border payments market which is estimated to be worth $156 trillion, according to McKinsey, continues to see steady growth, and blockchain is playing an increasingly significant role in reducing settlement times and improving transparency for clients.

Programmable payments automate treasury services for multinationals

Another important development discussed was one which allows for payments to be automatically executed based on predefined conditions. Neukirchen emphasised the efficiency gains, “Programmable payments enable us to automate payments, ensuring they are made at exactly the right time without manual intervention.”

Kalyan elaborated on how programmable payments are particularly useful for clients with complex treasury operations. "We have seen companies, especially large logistics and marketplace players use programmable payments to streamline their payment flows,” he said. For these companies, programmable payments ensure that payments to vendors, suppliers, or service providers are made based on delivery milestones or other contractual obligations, greatly reducing delays.

Programmable payments automate vendor payments upon the completion of delivery. They can optimise supply chain management, reducing friction in the payment process, and ensuring timely payments across different geographies.

Onyx expands blockchain use cases beyond payments

Kalyan highlighted JP Morgan’s blockchain solutions, not just for payments but also for broader financial services like intraday repo transactions. “Onyx offers the ability to settle intraday repos much faster than traditional systems, which is crucial for institutions managing large-scale liquidity,” he said.

Neukirchen underscored how the use of Onyx is expanding beyond payments, into areas like securities and asset management. "We’re working with financial institutions to execute short-term funding operations through Onyx, enabling them to manage liquidity in real-time," he explained. This capability has proven especially valuable for asset managers dealing with high-frequency transactions and short-term debt instruments.

AI-driven fraud detection secures payments in real-time

Security was another key focus of the conversation, with Alan Lin, head of APAC payment rails, discussing the bank’s investment in AI-powered fraud detection. “Our AI systems are designed to detect fraud patterns in real-time, ensuring that suspicious activity is flagged immediately,” Lin said. He added that AI has made it easier to analyse large volumes of transactions, particularly in high-risk areas such as cross-border payments.

Lillian Sim, global head of multinational corporation (MNC) sales at JP Morgan, explained how fraud prevention is critical for corporate clients. “For many of our clients, especially in Asia Pacific, handling cross-border payments means being exposed to various risks, including cyberattacks,” Sim noted. She emphasised that AI helps mitigate these risks by continuously improving the bank’s ability to detect and prevent fraud.

In 2023, fraud in financial services amounted to $5.38 trillion globally, according to the Association of Certified Fraud Examiners (ACFE), with cross-border payments being particularly vulnerable. JP Morgan’s AI-powered tools are critical in detecting and preventing fraud, ensuring that clients' transactions remain secure.

Perspectives from the Asia Pacific market

Lin shared about payments challenges and opportunities in the Asia Pacific region. “Asia Pacific is both an exciting and challenging market for payments. The regulatory environment is fragmented, and managing liquidity across borders requires a nuanced approach,” he explained. He emphasised that JP Morgan’s local expertise helps clients navigate the complexity of the region, especially in managing regulatory requirements.

Sim added that corporate clients in Asia Pacific are primarily concerned with liquidity management and security. “For our clients, seamless cross-border payments and fraud prevention are key. Our solutions, such as JPM Coin and programmable payments, are helping them operate more efficiently in a highly competitive region,” Sim said.

The Asia Pacific digital payments market is projected to grow at a compounded annual growth rate (CAGR) of 8.5%, making it one of the fastest-growing regions for cross-border transactions. However, regulatory diversity and infrastructure fragmentation pose challenges that necessitate innovative solutions like programmable payments and blockchain.

Leading the future of payments with innovation

JP Morgan’s innovations in programmable payments, JPM Coin, Onyx, and AI-driven fraud detection are transforming how multinational corporations manage liquidity, automate payments, and protect themselves against fraud. These technologies are not only enhancing efficiency but also helping businesses navigate the complexities of cross-border operations.

As Neukirchen stated, “We’re building an ecosystem that combines the agility of fintech with the stability of traditional banking”. With its continued focus on innovation, JP Morgan is positioning to lead the future of global payments, providing its clients with the tools they need to operate efficiently in a dynamic financial landscape.