Summary
JP Morgan Chase and First Data decided to split up after having a joint venture for payments processing. JP Morgan Chase probably is convinced that the execution on their own will offer more opportunities (i.e. driving cost down).
Analysis
In the midst of the financial crises and lots of companies outsourcing all kinds of processing, operations and IT activities, it is remarkable to view the move of JP Morgan Chase (original article).
One would expect that JP Morgan Chase, who recently acquired Bear Stearns as a result of the credit crunch, has enough on the table to worry about momentarily. As split up with all the effort needed for that, seems not fit in the picture at all. Unless JP Morgan Chase is planning for an unexpected move in another direction.
First Data owned by private equity company KKR, a well known investor, must perceive this a sensitive loss for their current business. With the pertinent ambition to accelerate the evolution of commerce around the world by providing payments processing and payments services other competitors and players in this market place (like MasterCard, Visa and Currence) will directly or indirectly profit from this loss.
