While JPMorgan Chase has been one of Apple Pay’s most vocal visible backers, it has been aggressively working on plans to also become one of Apple Pay’s most visible rivals, as it readies its own mobile payment app for launch.
“We think that we can also be friendly to merchants with data, with pricing, with simplified contracts. So we are trying to make this an ecosystem that works better for everybody and is far more secure. I have customers on both sides and I’m far more secure,” said Chase Chairman and CEO Jamie Dimon in a conversation with financial analysts Tuesday (Oct. 14), following the release of it’s third-quarter earnings.
Chase CFO Marianne Lake argued that developing its own seamless payment capabilities for Chase Pay and Quick Checkout will mutually benefit merchant sales and customer experience. “We are continuing to work on our own proprietary wallet and payment capabilities that will be piloted and then subsequently launched over the course of the next coming months,” Lake said, adding that eventual integration into Chase.net is the next planned step.
Dimon tackled the logistics of where the value lies in digital wallets and how the future for Chases’s own wallet can align the benefits its customers seek.
“So our basic philosophy has been that you, the customer, who want to be able to use your debit cards, your credit cards in a way that you want and that we want to make it available to you whether it is Apple Pay, in-store apps, other people’s wallets, Visa wallet, our own wallet — all which will have benefits, etc.,” he said.
Also discussed Tuesday was Chase’s increased funding for cyber-security. Dimon said that Chase will double its spending for cyber-security during the next four to five years. That would bring Chase’s annual security budget from $250 million to $500 million over the next five years.
“What we are seeing inside the space, not surprisingly, is this relentless constant and evolving set of attacks and we need to be constantly evolving and constantly vigilant in response. So it is entirely reasonable to assume that we will continue to increase our investment over the course of the next several years,” Lake said.
Tackling cyber-security to secure Chase’s data can’t be done alone, Dimon said, as it’s a multi-dimensional approach that incorporates ensuring proper cyber control is also being used by vendors. The company also mentioned that it’s now having employees try to break into bank systems, to help with security testing.
“This is one area where the government and businesses have been collaborating really well. And for a long time. of course. all these government agencies — and I think we need that because the government sees all kind of attacks and they are a fountain of information. And then also the industry itself collaborates, which is we share information with other banks immediately when we see something happening. So maybe even if something happens to you, you can help one of your brethren avoid a problem like that,” Dimon said. “And then cyber goes beyond just yourself. It’s making sure that all of your vendors you deal with have proper cyber control, that all the exchanges have proper cyber control. We have identified this as a huge effort. We’ve been very good at it until this recent breach, which we are not going to make excuses for. We will invest any and all things we need to do to get it right.”
That doesn’t mean that the fight will be easy or even necessarily successful. “It’s going to be a battle. We have already seen a lot of very, very serious — far more serious than personal data being taken where Social Security numbers, security codes, account numbers, etc. And we do think that unfortunately there are going to be some wins and losses in this. This is not going to be one of those things where it is going to be absolute and we don’t want to be sitting here saying you can absolutely be protected because we think that will put you in a false sense of security.”