In the quest by banks to embrace the digital (payments) age, casualties mount, here and there. Call it trial and error in bits and bytes.
So it is that JPMorgan Chase will partially shut down its Chase Pay app – the bank’s third digital offering in as many months to fall by the wayside or shut down.
As Bloomberg reported on Wednesday (Aug. 21), the bank is informing users that they will not be able to use the Chase Pay digital wallet to transact in-store. There is a bit of lead time, as the offering will not be fully shut down until next year. And it should be noted that Chase Pay will not fully go dark – it will still be available to use on websites and apps tied to participating retailers.
Thus in the race against Apple Pay, Samsung Pay and other companies, Chase, at least in this respect, gave the nod to the fact that the times are indeed (a) changing – and, in fact, have changed too much to offer the standalone digital wallet in the physical commerce setting.
In an interview with the newswire, Eric Connolly, who helms Chase Pay, said that “when we started this, it was four years ago – the payment space has changed a lot over that period of time, and customer behavior has changed. A lot of merchants have shifted to ‘buy online, pick up in-store’ and have invested in their online presence and their apps.”
Against that backdrop, Chase is targeting the online channel, where competition is fierce. There may be some (rather) slight traction for Chase, which announced that Grubhub will soon accept Chase Pay.
The Wednesday news comes after the bank shut down its digital bank Finn in June, a year after a national rollout. In July, the company stopped working with online lender OnDeck in extending loans to small businesses.
To be sure, five years is a long time in the payments world, and especially so in omnichannel. Chase has said that the online option – where the Chase Pay button was integrated directly into merchant apps – has been growing by double digits. But per stats compiled by PYMNTS in the Buy Button Index last month, the hill may be steep. The share of online merchants offering the Chase Pay button was 40 basis points in the second quarter of this year, and for PayPal that share was 69.5 percent.
The shutterings show a few things: the willingness to take risks and to invest in nascent technologies, to a significant amount. Chase, after all, spends billions of dollars on its tech efforts. The spotlight shines a bit brightly here, too, on just how difficult it is to grab crucial stakeholders. That’s especially true when crafting an omnichannel strategy or fine-tuning a strategy as it plays out.
In the end, sometimes the plans to disrupt … get disrupted.