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Interesting column by Matt Levine on Bloomberg Opinion today. In the piece “Schwab Broke Ameritrade to Buy It” he points out that the acquisition bid from Charles Schawb (SCHW) today to buy TD Ameritrade (AMTD) for a reported $26 billion comes after Schwab’s announcement that it would cut its commissions for online stock and ETF trades to $0 knocked 25% off the price of TD Ameritrade shares back on September 30. The stock had closed the day before the announcement at $46.70 a share for a market cap of $25.3 billion. Schwab’s current offer has is for just $26 billion, essentially the pre-$0 commission announcement valuation. So Schwab gets the company, if the deal goes through, for zero premium on the September 30 price, Levine points out. The move to $0 trades hit TD Ameritrade much harder than Schwab because Schwab gets only 7% of its revenue (in 2018) from commissions and TD Ameritrade its 36% of total net revenue from commissions.

As much as it may gall TD Ameritrade to get an offer from the company that tanked its stock price, I’d note that if the deal goes through at least someone wanted to buy TD Ameritrade.

Not sure I’d say the same about Citigroup (C).

You may have noticed that last week Citigroup announced a partnership to offer smart checking accounts through Google Pay.

Frankly, the idea of the deal is kind of shocking. Citigroup looks like it will give up the interface for these customers to Google Pay (Alphabet.) What Citigroup is left with its the back end of a checking account and all the regulatory requirements that attracted Google Pay to this deal in the first place.

But what the deal exposes is Citibank’s need to do something–partner with Google Pay–to fix its deposit problem. Citigroup has a relatively small brick and mortar presence in the United States with branches in just six big cities. That has left it trailing badly in the race to attract customer deposits, one source of cheap cash from banks and one that relieves the bank from a dependence on short-term capital markets and their liquidity. Citigroup’s $186 billion in U.S. retail deposits sounds like a lot but it’s only 25% of the retail deposits at Bank of America (BAC). In an effort to build up that deposit base Citibank has been offering online accounts paying 2% or better. Which has resulted in high cost of money for Citibank. Bank of America pays 0.8% for its retail deposit funding. Citi Bank pays almost twice that.

Which is why Citigroup gave up so much to sign a deal with Google Pay.

If you’re following the disruption in the financial sector at home–and in my posts on the disruption of the sector from FinTech–you should note that the Google Pay/Citigroup deal is just the beginning of a process that will result in many banks paying up from the privilege of slapping an Internet logo from Alphabet, Amazon (AMZN), PayPal (PYPL) and others on their products.

It’s the world turned upside down.