Mobile Payments

Chase Pay’s Big News (And Why Mobile Is A Marathon, Not A Sprint)

Measure twice; cut once.

It’s one of those old school pieces of advice from a parent or grandparent at some point that exudes a basic common sense that is easily to believe. It is also a piece of advice that easily gets supplanted by the infinitely more popular motto of the digital era: “move fast and break things.”

And move fast and break things has had its notable successes — Facebook, Uber and Airbnb spring to mind. What those successes tend to disguise is a much harder game plan to make work than almost anyone gives it credit for being. Marc Zuckerberg originated the quotes, but got over the sentiment pretty quickly as CEO of Facebook.

Measure twice, cut once is a classic, on the other had, for the very good reason that it has a long and diverse track record of success.

It’s a track record that Chase is betting on as it rolls out its entrant into the ever expanding field of “…” Pay players: Chase Pay.

“We studied this and learned we want to take things a little bit slower,” noted Chase Executive Director and CMO Dina DeMerell “We are not pursuing the big marketing blowout the way some other players have done — we are adding features and adding partners and rolling this out very carefully over the next several months.”

But that carefulness is baked-in into the design of Chase Pay — because, DeMerell notes, from their point of view, when it comes to mobile payments, “this is just the beginning,” and getting out ahead at the beginning of the race is far less important than being ahead at the end.

How do they plan to get there?

Building Busily — And Advancing Steadily

Chase’s payments entrance isn’t really a big secret. It’s been a well-known fact since last fall that they’d hit the market with their own flavor of “Pay.” However the milestones that made it real began to happen just a few months ago.

In September 2016, Chase announced it would soon be open for business with Best Buy — in store, in app and online. A few weeks later, Chase announced even bigger news: the first mobile wallet (other than its own) accepted within Walmart Pay (and on Walmart’s App, and on Walmart.com).

This week Chase Pay notched its latest few milestones — with the launch of its dedicated mobile app, the live launch of the Best Buy partnership and a payments partnership with Starbucks.

Chase also announced that Chase Pay will soon be open for business with Walmart, as well as Phillips 66, Conoco, 76, ShopRite, The Fresh Grocer and participating Shell stations.

Those opening choices are far from accidental,DeMerell  notes.

“We have great partners and partners that clearly reflect our customer’s needs. If you think about your daily life, you get coffee, you pick up gas you might buy some groceries — it’s about meeting shopping needs where consumers actually shop.”

And giving those customers what they actually need. Which means realizing that though Chase Pay is a payments service…

It Isn’t Really About The Payments

The ability to pay seamlessly and smoothly isn’t the endgame for mobile payments — it is,DeMerell notes, the table stakes.

“This has to be beyond the payment itself — it also has be be about saving time, saving money and easily tying into our customer’s entire Chase financial life. When you look at the architecture of the new app — and how much of it is really about improving the routine experience — we are looking to add a lot more into the app around improving that daily experience.”

Customers, she notes, aren’t looking for a new payment solution — they have a way to pay that works just fine in the plastic cards Chase already issues. Those aren’t broken — so merely matching that functionality isn’t sufficient. Consumers, she notes, need reasons to use mobile other than payment — like embedded loyalty, or enhanced e-commerce features including the ability to order food ahead.

Consumers, DeMerell, noted, don’t need a payment solution, but a companion to make navigating their offers, their cards, their loyalty points and their commerce life in general, genuinely useful. That’s how Chase is looking to show up for customers.

Equally important…

Also Going To Bat For The Merchant Partners

Chase Pay brings with it something that few merchants can argue with — tens of millions of card customers who could bring their spend with them. Equally attractive is Chase’s “000” pricing model, which lowers the cost of payments to merchants while reducing fraud.

But the secret sauce, DeMerell, is beyond all that — and comes into play by helping those merchant partners really maximize mobile’s ability to keep them wired to their customer base.

“It is really about working with [merchants] to think about how we can help facilitate engagement with customers, or how they can think about loyalty and rewards.

The goal, she says, is not to convert their merchant partners by talking about how great mobile could be — but instead point them to the all the ways it is already great and capable of going to work for them.

Much More Ahead

The long game is the only game, as far as Chase is concerned, because there is so much ground to still claim.

“If you look at the numbers of overall spending on a mobile product, there is far from a clear winner here,” DeMerell emphasized. “We haven’t even dented the potential of what the mobile space could be. We think we are uniquely positioned with the merchants that we have and the base of over 60 million customers that we can bring this to market to create something that can start to make a dent in that market share.”

It won’t happen in the next few weeks or even the next year. The journey, DeMerell, is going to be much longer.

But according to Chase, they are happy to be on the journey, and confident that measuring twice and sacrificing speed for accuracy will be the path to reaching mobile full potential.

 

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LATEST PYMNTS REPORT: MARCH 2020 B2B API TRACKER  

B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

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