JPMorgan’s mobile wallet may get a jolt from a coffee juggernaut.
Chase Pay is being integrated into the Starbucks mobile app, which is being used at more than 7,500 of the latter’s retail locations. The payments relationship will begin later this year, said Gordon Smith, who heads JPMorgan’s consumer banking unit as chief executive officer, during the financial firm’s investor day presentation on Tuesday, Feb 23.
The mobile app itself, for Starbucks, has been responsible for roughly 10 percent of the sales conducted in the United States inside of the coffee chain’s brick-and-mortar locations, through the process known as “order ahead” wherein 6 million transactions took place in the fourth quarter alone, Starbucks said in its most recent earnings announcement.
The latest agreement expands a relationship between the two companies, though an intermittent one, that stretches back more than a decade. The latest iteration comes more than 10 years after the JPMorgan and Starbucks collaborated on a cobranded card, known as Duetto, a rewards card, which launched in 2003 and which folded in 2010. The most recent announcement between the pair came as Starbucks said it had picked JPMorgan to help process non-mobile payments in the wake of the coffee company’s deal with Square, for non-mobile payments, being terminated.
Under the terms of the new, deeper relationship between Chase Pay and Starbucks, Chase Pay can be used both within stores and on Starbucks.com, via the mobile app, to reload Starbucks’ eponymous cards. Chase Pay itself is slated for a mid-2016 debut, with the company having said last October that the new mobile payments platform will be accessible across the firm’s 94 million credit, debit and prepaid card accounts. Transactions utilize tokenization, for security, JPMorgan said in its October announcement.
The latest link between JPMorgan and Starbucks comes despite (and in tandem with) the fact that the Starbucks application also can be used with Apple Pay, of course a competitor to any mobile payments initiative, including that of JPMorgan.