The list of companies creating digital wallets to challenge Apple Pay and Samsung Pay has now added JPMorgan Chase.
The banking institution is launching Chase Pay, a digital wallet that can be used to pay by phone in stores and cafes and to more easily pay in online stores and apps.
Chase’s CEO of consumer and community banking Gordon Smith announced it at the Money20/20 payments conference in Las Vegas on
Monday. In a video presenting the new product, Chase showed shoppers
paying in stores by displaying a QR code to the cashier, not by tapping
and paying through NFC technology like Apple Pay and Android Pay. Paying at a restaurant by taking a photo of the
bill was also demonstrated in the video.
Chase is partnering with MCX, the consortium of retailers
led by Walmart, to have Chase Pay accepted in its member stores,
restaurants and gas stations. Those include Kohl’s, Chili’s,
Sunoco and Best Buy. In some of these shops consumers will be able to
pay by showing a QR code within the Chase Pay app. In others, Chase
customers will have to use Chase Pay inside MCX’s own CurrentC app. However, it is not yet clear what stores will accept which method.
MCX has existed for several years, but its CurrentC app is still restricted to a pilot test in Columbus, Ohio.
The new service will make Chase Pay a rival for digital wallets from
Apple, Google and Samsung in an attempt to replace swiping a payment
card with tapping an app. Chase cards are compatible with
these services, but it has to vie with other banks inside these
wallets to be the credit or debit card that a costumer finally chooses.
However, in Chase Pay, only Chase cards are allowed.
Capital One also recently presented its own mobile payment feature,
even though it also plans to participate in Google’s Android Pay. Some analysts say this trend of new banking apps may complicate relations between banks and the big tech companies they are
partnering with on rivaling digital wallets.
Chase considers it has a stimulus for merchants to start using Chase Pay: they will pay lower transaction fees on Chase Pay purchases than they do on purchases made with other payment methods, a Chase representative said.
Chase Pay’s use of QR codes on phones means it should be compatible with most Android and Apple phones; Android Pay and Samsung Pay work only on Android devices and Apple Pay on iPhones. But using a QR code when paying is often not as easy as tap-to-pay methods like Apple Pay, Android Pay and Samsung Pay.
Chase Pay will launch “about the middle of 2016,” Smith said.
