JP Morgan Chase is jumping into the expanding mobile payments marketplace with a planned Chase Pay service that will launch in mid-2016 and take on products from established competitors, such as Apple, Google and Samsung.
The Chase Pay service will allow customers to pay for goods and services in-store, in mobile apps or for online purchases at retailers, including Walmart, Target, Best Buy and Shell, according to an Oct. 26 announcement. The service will be available to some 94 million Chase credit, debit and pre-paid card account holders.
Chase is partnering with Merchant Customer Exchange LLC (MCX), which is building a mobile payments service called CurrentC, according to Chase. Chase Pay will roll out to merchants that accept CurrentC, which will also process Chase Pay transactions. MCX services are available through more than 100,000 retail locations in the United States. Chase is partnering with 17 technology vendors so that other retailers can also offer Chase Pay services to their customers.
"Chase Pay solves a number of pain points for consumers and merchants," Gordon Smith, CEO of consumer and community banking at JPMorgan Chase & Co., said in a statement. "It will improve the customer experience and drive down the cost of payments."
Chase Pay will work on most smartphones and will allow consumers to pay for goods and services, even at gas stations and drive-up windows, the company said. The system will use the same technology that many merchants already use to scan gift cards.
For consumers, Chase Pay will also tie in to their existing loyalty cards so their purchases are logged in to their loyalty accounts automatically. In restaurants and other locations, consumers will be able to use their smartphones to take a picture of a receipt and pay with Chase Pay, while in stores that accept Chase Pay, consumers will be able to use their mobile devices to pay at the register, according to Chase.
For merchants, there will be no network fees, merchant processing fees or merchant fraud liability, the company stated.
"Featuring Chase Pay within the CurrentC app will give customers greater flexibility, convenience and value when they pay with their mobile device," Mike Cook, senior vice president and assistant treasurer of Walmart Stores, said in a statement. "This gives us an opportunity to simplify payments for Chase's extensive customer base, deepen loyalty in a way only MCX can and enhance the customer experience through added services consumers expect from a mobile application."
Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co.
Chase Pay works with barcodes on the Chase Pay mobile app, while mobile payments competitors Apple Pay and Google Wallet use a near-field-communication (NFC) chip that's only found in some smartphones so far.
Samsung Pay, which launched in September in the United States, uses biometric authentication through fingerprint ID and NFC, and can also emulate magnetic-stripe cards for purchases. Samsung Pay works with that company's latest smartphones.
Apple Pay, which has been available since October 2014, lets Apple users make purchases and payments using their late-model iPhones, iPads or Apple Watch devices.