The problem with payments

Jon Ingram, portfolio manager, discusses mobile payments and data privacy

Aug 09, 2019
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Recently, I received an email from a high street food retailer who specialises in sushi. As someone normally rather careful with their email address, I wondered how I had been signed up by this reputable company. Then just a few days later, I received an email from a chain of bars that operate in the City. Again, I thought, I really don’t recall giving my personal email address to this establishment (though let’s be honest, if the sushi email hadn’t arrived days earlier I probably wouldn’t have had the same conviction that something strange was happening). After only a small bit of detective work, I realised that I had used a mobile payments application to make my purchase (singular!) in both establishments, and a quick internet search revealed in the terms and conditions that on using their payment service the merchant will receive, amongst other things, my email address and home address.

This incident started a more thought provoking exercise regarding data, and privacy. I’m not sure how many people who enjoy the convenience of tapping their phone on a payment terminal realise they are handing over details such as their home and email address. I for one certainly did not.

Recent court cases and fines mean the issue of consumer privacy is coming to the fore whether the large technology companies like it or not. It is these companies that go out of their way to proclaim they will not sell your data, yet in my opening example, it was one of the largest that was passing on my personal information. No doubt our in house lawyers would like me at this stage to point out that you can disable this, as I have now done, but that was not the default position I found myself in as a new user of the product.

When people think of leading technology companies globally, the mind inevitably wanders to the Apples, Googles, Facebooks and Samsungs of the world. But the very thing that made them household names – i.e. the fact that we are customers of most of these companies ourselves, may indeed be the biggest problem looking forward as the focus on consumer data and consumer privacy becomes a very two edged sword. More importantly, a look at the opportunity set within technology stocks in the UK shows a universe of companies that specialise in business-to-business (“B2B”) relationships as opposed to business-to-consumer relationships, where these issues are likely to be far less problematic. Indeed within the much unheralded UK technology space, the largest companies, including Sage, Halma and Aveva*, would all be considered B2B providers. With recent impressive share price performance it seems that the market may just be waking up to the opportunities on offer here.

Jon Ingram is Head of the Unconstrained portfolios sub-team within the J.P. Morgan Asset Management International Equity Group – Behavioural Finance Team

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*as per inclusion in the MSCI Europe IMI Information Technology 10/40 Index

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Jon Ingram

Fund Manager, JPM UK Dynamic Fund, J.P. Morgan Asset Management

Jon Ingram is portfolio manager of the JPM UK Dynamic Fund and Head of Unconstrained Investing within the J.P. Morgan Asset Management Europe Behavioural Finance Team.

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