America's No. 1 financial conglomerate

Chapter 356 Another Storm Rises on Wall Street

Ernst has his own plans and schemes, and what he is doing now is clearly beyond Wenger's reach or even imagination.

All he could do was to support him to the best of his ability.

Since he wanted to exaggerate his political influence to the whole of America, all Wenger could do was act as his front man, establishing connections and ties of interest with those Washington gentry.

"You can contact Epstein; he should be able to provide you with a lot of information."

Having taken this middleman in for so long, it's time for him to put in his effort.

During this period, thanks to MGM's connections in the entertainment industry, this guy has been doing very well, sending all sorts of women to the beds of many big shots.

It is said that he is now a frequent guest at many high-end cocktail parties in New York and Washington, not because of his status, but because he is good at entertaining guests.

"I will. Such an important resource must be utilized." Wenger nodded, and after the two finalized some details, he changed the subject.

"By the way, didn't you say you were going to enter the e-commerce market? You went to great lengths to acquire IMDB, but what happened after that? It's like a kite with a broken string; we haven't seen a trace of it at all."

Arsène Wenger was in charge of the entire acquisition of IMDB, and no one knows IMDB better than him.

No one knows better than Ernst how much money he's poured into this website since he acquired it.

The acquisition price alone was as high as 40 million US dollars, which is no small amount, and subsequent investments have been continuous.

The company upgraded its equipment, increased staffing, and made its operations more standardized, but it also burned through more money, spending $40 million on just these two items.

That's not all. IMDB has developed so rapidly, and its content has become increasingly rich. Previously, the website mainly focused on the film industry, but now it has extended its reach to the television series, entertainment programs, and records.

From popular American dramas to classic Japanese dramas, dramas from all over the world are included; the same goes for programs, basically every program from every region can be found on IMDB.

The record industry is still in its infancy, and apart from some album and artist introductions, it is not yet very standardized.

However, after all this, 1MDB's user base grew rapidly, making the original office space insufficient. Not only were people crammed together, but storing equipment also became a problem, forcing them to search for new and larger office space.

And Ernst? He was incredibly generous.

When I learned that IMDB needed a new location and more operating funds, I immediately transferred $50 million to IMDB's account.

In total, a total of $1.3 million was poured in, but what was the result?

It's like throwing a huge rock into a bottomless pit; you don't even hear a sound.

"If it were anyone else, they would probably be heartbroken and unable to sleep at night. Only you can remain so calm and collected." Wenger shook his head helplessly, his tone tinged with a hint of teasing.

But jokes aside, Wenger objectively stated, "Of course, the massive amount of money poured in has yielded results."

IMDB's data has surged, with the number of entries in the database soon to surpass 100,000, more than double the number before the acquisition.

"Not to mention the number of registered users, which has more than tripled. If we only look at the users, IMDB has now grown into a towering tree."

Wenger's concern was that these things alone wouldn't be of much use, since it was clearly stated in the contract that IMDB would not be allowed to charge users for profit.

No matter how many users you have or how good your data is, there's very little room for monetization.

He knew about Ernst's e-commerce plan, but knowing it wasn't enough; the key was to take action.

Ernst, however, did not think so. He believed that IMDC was simply a way to drive traffic to the e-commerce website that would be established in the future. As long as the data continued to grow, monetization would be just a matter of time.

"As you know, there's been so much going on lately. Google and Microsoft are locked in a fierce battle for market share, there's the IPO of Leap Games, and there's also Cass's situation. There simply hasn't been any extra time to plan for e-commerce."

E-commerce is unlike other types of websites, which can be accomplished by hiring a few programmers, talking a few words, and writing some code.

There are many intricacies involved. Not only do you need to connect with merchants, but the source of goods is also of paramount importance. Without a stable and high-quality source of goods, e-commerce is just a castle in the air and cannot be discussed at all.

E-commerce today can only have two development models: eBay's auctions and Amazon's self-operated model.

B to C?

The existing conditions simply don't support it; there simply weren't that many merchants in the early stages.

"You'd better hurry up, or someone else will beat you to it, and it will even affect PayPay's business."

Ernst frowned upon hearing Wenger's words, a look of confusion on his face. "What do you mean by that?"

Haven't you been following news from e-commerce websites like Amazon lately?

Ernst shook his head. He had been focused on other companies' affairs lately and hadn't really paid much attention to the developments in the e-commerce sector.

Could it be that Bezos, after being given a small punishment last time, is up to something again?

Seeing Ernst's puzzled expression, Wenger said helplessly, "You really haven't been paying attention?"

Amazon and eBay have joined forces and jointly invested in a company called bilI, which is related to PayPal.

"Likewise, they also do online payment."

Ernst listened without much surprise on his face, and said nonchalantly, "What's so strange about that? Since PayPay became a hit, similar online payment websites have sprung up all over the United States like mushrooms after rain. Several major financial institutions alone have launched many similar products."

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"As leading companies in the e-commerce sector, Amazon and eBay handle a massive volume of transactions daily, so their demand for online payments is naturally higher than that of other companies. It's perfectly normal for them to join forces to invest in an online payment company, or even develop their own online payment tool. I'm not surprised at all."

"It would be abnormal if they didn't do anything at all."

Seeing that Ernst still didn't take it seriously, Wenger continued, "The commission offered by Bichuan Company is only 2%."

""

"Wall Street?" Upon hearing the 2% commission figure, Ernst looked sharply at Wenger, his relaxed expression vanishing instantly, replaced by a serious look.

Wenger nodded when he saw that Ernst had finally realized the seriousness of the situation.

Why is it that mobile payment hasn't become popular in the West during the mobile payment era?

Many people say that Western credit cards are convenient and safe, but these are all nonsense.

No matter how convenient a credit card is, can it be as convenient as a mobile phone?

As for safety issues, those are completely irrelevant.

Most credit cards do not have PINs, so anyone can use them to make purchases. Every year, tens of thousands of credit card fraud cases occur across the United States.

Although some cases of fraudulent transactions are compensated by banks, that is only a small portion, and many users have to bear their losses themselves.

One of the biggest reasons why mobile payments haven't taken off in the West is the obstruction from the banking system.

There are fees associated with using credit cards. For every $100 spent, the merchant has to pay a 3% transaction fee, which is three dollars. This is not a small amount; it all goes into the pockets of banks and payment institutions.

Banks, in particular, take the lion's share, receiving $2.5, which is known internally as fee income and is a significant source of bank profits.

How many people in the US use credit cards every day? Whether it's for daily shopping, dining out, or travel, credit cards are almost indispensable.

How much money can the American banking system make in a day just from credit card transaction fees? It's practically a money tree; it wouldn't be an exaggeration to say it's making a fortune every day.

If mobile payments take off and users start using their phones to pay, the frequency of credit card usage will decrease significantly, and banks' transaction fee revenue will naturally drop substantially.

This cake is only this big. If more people come to the table to share it, the people at the table will get less.

As beneficiaries of the system, how could banks possibly be happy to see mobile payments rise and steal their business?

Even if it's PayPal, what can they do?

We still have to obediently follow the rules set by the banking system.

For any user who tops up their PayPal account with a credit card, PayPal charges a transaction fee to the merchant when the user makes a purchase on the platform, and then pays that fee to the corresponding bank.

Take the YueDong gaming platform as an example. When a user tops up their PayPal account with a credit card and then makes a purchase on the YueDong gaming platform, PayPal deducts a certain percentage of the transaction fee from the YueDong gaming platform and then hands over this money to the bank.

However, PayPal did not act as an intermediary and did not charge the extra 0.5% payment channel fee.

Furthermore, PayPal users do not incur any transaction fees when transferring funds in their PayPal accounts.

It was this killer feature that prevented major banks from developing their own payment systems and trying to compete with PayPal for a share of the market, but they still couldn't overturn PayPal's dominant position in the online payment field.

But now bi11 is charging a 2% commission, which is 0.5 percentage points lower than the 2.5% charged by banks. This would be impossible without the support of Wall Street.

BILI is not a charity; it can't just throw money at the company to grab users. The amount of credit card fees generated every day in the US is enormous. Even if it only subsidizes 0.5%, no company can sustain such losses in the long run.

Not to mention the major banks on Wall Street that have credit card businesses, which can be bankrupted instantly by simply transferring money through BI1.

"It seems Wall Street is trying to start from scratch and create a new PayPal," Ernst said in a heavy tone, his eyes filled with vigilance.

"Those giants on Wall Street aren't fools. They've realized that online payment is the inevitable trend of future business development. But their own online payment tools are now being utterly crushed by our PayPay, leaving them with no chance to fight back."

"Since they couldn't do it themselves, they all conspired to create a new PayPal. This new PayPal was no longer led by me, but completely controlled by Wall Street. They wanted to firmly grasp the lucrative online payment market in their own hands."

"Moreover, they targeted e-commerce very precisely. The e-commerce sector has the largest user group for online payments, with a massive number of transactions completed online every day."

"Once we conquer the e-commerce sector, we'll have grasped the lifeline of the online payment market. Then we can gradually erode PayPai's market share and eventually overthrow PayPai's dominant position in the online payment field."

"That's a really ruthless move; they're trying to undermine my resources."

After listening to Ernst's analysis, Wenger nodded. "That's what I was guessing too, but I'm not entirely sure about the specifics. You could call Peter Thiel and ask him; he should know the most."