If the way to a merchant’s heart is through its payments economics, Chase is hoping that it might win over a whole bunch of them.
Chase finally lifted the veil on its plans for mobile payments yesterday (October 27) – a mobile/digital closed loop network of merchants and consumers. One of its key differentiators is its embrace of a “merchant-friendly” value proposition in the form of favorable payments economics, integration of existing merchant loyalty programs into its mobile payments platform, and its indemnification of the merchant against any consumer-initiated fraud.
And, its announced partnership with the network that was designed to be the mobile only, merchant friendly network – MCX.
Gordon Smith, CEO of Consumer & Community Banking at JPMC Chase Cards, introduced Chase Pay as a mobile payments solution that provides a “true omnichannel” payments experience – in-store, in-app and online purchases – and built the case for why he believes Chase Pay will be a formidable force in payments:
- Consumer scale with 94 million consumer accounts (debit/credit) and 1 out of every 2 households in the U.S. is a Chase customer. This makes Chase #1 in total debit and credit volume in the U.S.
- Consumer engagement with typical Chase consumers visiting Chase.com 16 times a month – more frequency, he said, than they visit the Wall Street Journal, New York Times and USA Today combined from their mobile devices
- Merchant services as the #1 wholly owned merchant acquiring business in the U.S.
- Financial heft and stability with $707 billion in sales.
- Favorable economics: Merchants will pay a fixed fee for payments processing, zero fees for value-added features such as security and tokenization and will be indemnified for consumer-directed fraud.
- Value-added scale having assembled a portfolio of technology partners that will enable new Chase Pay features and functions including a partnership with LevelUp that will enable mobile order ahead to more than 340k merchant locations in the U.S.
In the world of Chase Pay, the Chase account will operate as a platform for enabling a variety of data-driven and personalized offers and promotions to Chase Pay customers, including the integration of the merchants’ own loyalty programs. This capability, Smith reiterated,not only simplifies the consumer’s access to a variety of merchant loyalty programs but gives merchants an incentive to extend Chase Pay to its consumers.
Mike Passilla, CEO of Chase Commerce Solutions said that “beating the swipe” is essential to achieving success and scale in mobile payments. Passilla believes that Chase Pay accounts will become an enabling platform for the capture, distribution and redemption of a variety of consumer-directed loyalty and offers and promotions and deals, including what individual merchants may have in place today to serve their consumers.
The partnership with MCX brings merchant scale to what Passilla describes as a platform with existing consumer scale. The rollout of the 100,000 merchant locations that are part of the MCX network will begin in mid-2016.
Smith said that Chase Pay’s partnership with MCX, which includes such storied retailers as Walmart, Target, Best Buy and Shell, Chase Pay, will go to market with a cloud-based mobile wallet that will work with nearly all smartphones –and the technology that just about all merchants have in their stores – scanners that can read a QR code. Chase Pay will not support NFC.
It will, however, support tokenization to secure payments — across all channels – in-store, in-app and online.
“Our partnership links Chase and its customer base with CurrentC’s extensive network of leading retailers, restaurants, grocery stores and fueling stations, which process over a trillion dollars in transactions annually at more than 100,000 U.S. locations. This is a significant milestone, not just for MCX and Chase, but for mobile payments overall as the industry continues to take shape. Everywhere CurrentC is accepted, Chase Pay will be accepted,” Smith confirmed.
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