Podcast with Max Neukirchen

KAREN: This is a PYMNTS Original Podcast. Hey, Max. Thanks for joining me today. I'm looking forward to our conversation in our series with JPMC on the digital transformation of the treasury. This episode is all about Next-Gen merchant technologies and what CFOs and treasurers on the retail side of the industry need to help better manage their cash. So again, thanks for making the time.

MAX: Thanks for having me Karen and I'm glad to be here.

KAREN: So let's start with perhaps one of the most obvious situations that retail is now, is now grappling with. Here we are on the doorstep of holiday 2020 and to say that 2020 has been a challenging year for retail, certainly more than a slight understatement. But that said, I'm curious Max about how the conversations that you're having with CFOs and treasurers about payments and cash flow are different this year than perhaps they were last holiday season.

MAX: This year's holiday season will definitely be different from any of the previous ones that we experienced. First of all, I think from a payment standpoint, many CFOs and treasurers are wondering how they need to setup their business so that they can accept payments in any way that their customers want to pay.

That is typically more a challenge actually for smaller merchants. Some of whom did not really have an online or e-commerce capability so far and now with more and more consumers ordering online, they really need to build out those capabilities and we have for example a lot of smaller retailers. We have reached out to get setup with digital and online payments and that is definitely top of mind for many of them. I think larger merchants often talk about how they can expand and enhance their online marketplaces because they also acknowledge that more and more of their products need to be online and digitally available so that they can reach their customers.

And then I think the last important point is also it's not only about how merchants can accept payments online, but also how they can link large parts of their business online especially also the logistics, the delivery and all the other aspects of digital merchandising and digital business and linking that as payment is also top of mind for many treasurers and CFOs.

KAREN: Max when we think about the 2020, the year 2020 and the expectations that I think we may have had back in March when the pandemic lockdown, the economy and obviously retail as a part of that and we were thinking that the duration was certainly much shorter than it has turned out to be and many consumers still are reluctant to engage in the physical world.

Do you think that that retailers expected the digital shift to happen in both the volume and what appears to be the permanence that we now see it to be?

MAX: I think the shift that you described took everyone by surprise and the pandemic has definitely accelerated and shift towards digital and that is also why digital is such an important topic for CFOs and treasurers today. What I also hear from many of our clients that they actually think that many other changes that we have been seeing, in terms of increase of cut lock present volumes versus current present volumes in the store and in terms of customer buying behavior, that many of those will be permanent and that they now think about how they adjust their business model accordingly.

So even in a world where we have vaccines widely available and some of the immediate impacts of the pandemic might be abating, the general belief is that a lot of the consumer preference changes that have happened will actually stay.

KAREN: And I do think we're seeing that when as retailers report earnings, they report that the massive uptick in online and obviously not so much in physical stores because of the lockdown but it's also to your point, a consumer preference. It does change the economics of the business though for a lot of retailers. You alluded to a change in business models. How are they internalizing that particularly as holiday happens and they're making their plans for 2021?

MAX: Yeah so first of all, I think a big change is a shift away from consumers I saw recently a survey of the Strawhecker Group that basically said that 60% of consumers with significant use less cash and switched more towards electronic and online payments. I think that is a very important shift that impacts almost all industries. The second point that has been very interesting though is how different industries have fared through the pandemic and experienced the changes that we have described here in very different ways. Supermarkets for example, had a big increase of their volumes in March and April but there's still a much higher rate in terms of volumes beyond the pre-pandemic levels because also people eat more at home than they eat away for example.

We had some interesting observations also in the big-box retail and home improvement stores, where actually both cut lock present as well as cut present payments have really increased as more and more people stayed home and used the time basis to improve their basement or do some gardening and then there's other sectors. Despite being already very online and digital who have seen real challenges, I think travel and entertainment and then you have many merchants who have experience once they switch to online, volumes that they normally only see during the holiday season. So they might actually feel that they are already well equipped to handle what will come in the next few months.

KAREN: I'm curious as to whether some of these conversations, you mentioned acceptance being so important particularly as more volume moves online, are retailers using this opportunity not just to enable digital acceptance but to optimize the mix of payments? I'm curious as to how CFOs and treasurers are thinking about that as part of their planning process.

MAX: That is a great question and the impact of the digital first world goes actually in the eyes of the CFOs and treasurers way beyond accepting payments.

That is one important piece and they want to ensure that they can accept payments the way that their customers want to pay. I think the second important aspect is payouts actually because many of their suppliers or their broader network also want to now switch towards digital and online payments. So I think having the same digital solutions on the pay outside is also very important. Then the next step is linking the two. So how do you have a digitally integrated pay in and payout solution and bringing the two together for efficient management of liquidity and balance sheet.

I think the third piece that has come with it is given that now, especially for smaller merchants, a lot more payments are done digitally and online. A real demand in terms of how the data that comes with this can be used more effectively for marketing purposes and also to control their business. So real-time reporting and data and analytics have been much more front and center even than prior to the pandemic and then linked to this, there's also all other aspects of the businesses, servicing of customers and marketing that have moved digital.

Another aspect that is very important and that is the linkage of the digital world, nevertheless to physical stores. Where a lot of customers want to order something online, pick it up an hour later in the store and that is also top of mind for many others, CFOs and treasurers. How they can create an integrated omnichannel experience.

KAREN: So Max, I want to push you on that a little bit because there's obviously a growing appetite consumer driven for not having to necessarily go into the physical store to retrieve items or even shop in the first place, but to do it online, stay online, pay for it online, pick it up either curbside or at the front of the store.

But all of those things also cost the retailer more to service and as retailers look at everything, the CFOs look at everything in the retail world margins, inventory, supply chain issues, trying to figure out what inventory levels are acceptable this holiday season because there's a lot of unknowns. How are they thinking about servicing this digital first consumer in a way that allows payment choice and omnichannel preference, but also preserves their margins? Do you talk to them about that at all?

MAX: Yes and given the pressure that a pandemic has put on, consumer buying behavior that is really a top of mind issue for many CFOs, treasurers and CEOs and business heads.

And what we definitely see that trade-offs need to be made between investments in the various channels, between digital and online and in-store, in anything omnichannel and as businesses see the importance of a digital first business, I do expect and we will see many of them making trade-offs with their physical presence and know if they have to make a choice to prioritize digital first and as they notice that this is basically where the trend is going which is often the way consumers want to shop.

KAREN: And it does make your point about this end to end look at the flows, acceptance flows in payouts in real-time in a consolidated way across channels is very important because now more than ever, with the blending of these digital physical worlds, having the pulse on what's working, what isn't, how costs may be escalating or not. It's crucial for making obviously decisions and managing cash as well of course.

MAX: Absolutely, but what I also really want to emphasize is the different experience that many of the industries and companies of various sizes had through the pandemic. There is many whose volumes are actually bigger than ever. They are often already strong e-commerce names. They're higher, they want to invest. And then there's other industries that have been hit very hard and that are really trying to survive and adjust to the new world. Hope that some of the consumer demand is coming back as the economy normalizes more.

KAREN: Yeah, I mean you're, I take the point that a lot of the restaurants sectors and certainly some segments of retail have been very hard hit and in many ways those that are hardest hit, were those that perhaps were struggling in any way that might have been disguised in a very robust economy but the pandemic is exposed a lot of, a lot of things including that. But it does, it does make the question as retailers examine their business where to put their focus, where to invest, where to serve customers, but you can't do that if you don't have the data to look at and an action and decision in a time frame that matters.

MAX: You're absolutely right and data, understanding customers has become, , was already a big priority at the beginning of the year but has become even more important as businesses think about where to invest where to put the priorities, how to best reach their customers and optimizing their business model and the data is available. It's through payments data, it's through inventory data, it's through balances and liquidity and pulling this together and making sense out of it is probably a very important differentiator when you think about who will be successful in the next two years and who will be less successful.

KAREN: And then what's the one piece of advice that you offer CFOs and treasurers as they're navigating certainly the short term, which is holiday 2020 but by thinking about 2021 and beyond?

MAX: There's probably two main pieces I often leave with CFOs and these treasurers. Number one, fully embrace digital and know that it's here to stay. We have seen an acceleration of the digital business world over the course of 2020 and hoping that some of this might reverse or go back to pre-pandemic levels. I think is not the right strategy. A lot of this is here to stay because it is just the experience that more and more consumers want and embracing that trend is critical.

And then the second point is in the digital world. We need to think about how we manage payments, liquidity, cash flows digitally but from a business standpoint, it is equally important to think about how digital payments connect with all other aspects of the business that is going digital and merchants need to have a good understanding how the individual pieces hang together so that they can deliver a great and consistent experience to their customers.

KAREN: It's a digital first message for a digital first world driven by consumer necessity initially but increasingly by consumer preference and obviously something retailers and every other business and every other sector of the economy needs to pay attention to. Max, thank you so much for your time. I appreciate your insights.

MAX: Thank you, Karen. Well it's great spending time with you. Thank you.

You've been listening to a payments original podcast. For more just like this one, visit pymnts.com or check us out on your favorite listening app. 


  • J.P. Morgan Merchant Services’ CEO, Max Neukirchen believes COVID-19 may have permanently changed consumer shopping and payment behavior.
  • Forward-thinking merchants with seamless omnichannel experiences have benefitted most from changing consumer needs.
  • Some retail segments have seen online sales reach levels normally reserved for the holiday shopping season.
  • Integrating digital payments with adjacent business processes can improve the speed and accuracy of an organization’s financial position.
  • J.P. Morgan is helping clients improve liquidity and strengthen their balance sheets by integrating pay-in and pay-out strategies.
  • Organizations that can integrate and understand data spanning payments, supply chain and treasury business processes can achieve a competitive advantage.   


Max Neukirchen

CEO J.P. Morgan Merchant Services

Max Neukirchen is Chief Executive Officer of Merchant Services, which serves clients of every size – from sole proprietors to the largest companies on earth. Merchant Services at JPMorgan Chase & Co. is the dominant eCommerce payment processor in North America and Europe. Max leads the business end-to-end, from product development and technology to relationship management and servicing for hundreds of thousands of clients. 

Prior to becoming Merchant Services CEO in January 2020, Max was Head of Firmwide Strategy and Business Development for JPMorgan Chase as well as Chief of Staff for the Corporate & Investment Bank.

Max holds a Master of Philosophy degree in Physics from the University of Cambridge, and a PhD in Finance from the Macquarie Graduate School of Management in Sydney.

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