JP Morgan Chase has unveiled Chase Pay, a “closed loop network with access to credit and debit customers” that leverages the bank’s 94m debit, credit and prepaid card accounts, uses QR codes for mobile payments and will be accepted by all members of the MCX retailer-led mobile payments consortium.
“We bring $700+ billion worth of spending on our debit and our credit cards and with MCX we bring roughly $1.2 trillion of US retail spend across all of these terrific merchants,” Gordon Smith, CEO of consumer and community banking at Chase, said during a keynote at Money20/20 announcing Chase Pay.
“We will preload 94 million accounts for our customers. We will preload it with the card that they use the most frequently. We will preload it with their names and addresses and all of those things so the customer doesn’t have to do anything but accept the terms and conditions.”
Chase Pay will be “progressively rolled out” to MCX merchants “starting in mid-2016”, the bank says, and customers will be able to use Chase Pay in stores, online and in-app. “Chase customers will be able to use Chase Pay wherever CurrentC is accepted – either directly or through the CurrentC app.”
“We’ve tried to build it around the principles of being simple, being rewarding and being secure both for cardholders and for merchants,” Smith explained during his presentation.
“We’ve simplified pricing — it will be one fixed fee,” he said. “We’ve greatly simplified the rules and we’ve tokenized the data for security.”
“So there will be zero network fees for merchants, there will be zero merchant processing fees for the merchants and there will be zero merchant fraud liability. We will make an approval, once we’ve made the approval, we’ll stand by that approval and the merchant will be able to count that as good funds.
“From the customer perspective, there will be a one tap payment to complete the payment transaction. There will be loyalty rewards which will be capturing both the loyalty rewards from Chase, Ultimate Rewards, and importantly, the individual merchant’s loyalty programme too.
“That’s one of the things the merchants told us, that they wanted their loyalty programme to be front and centre for their customers, and they want their information to be protected.
“We have substantial scale on the cardholder side of the transaction and MCX brings an exciting scale from the merchant side of the business. Chase Pay will be accepted everywhere that CurrentC is accepted.”