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October 28, 2015

Chase Enters the Digital Wallet Market

Mobile payments have finally gotten the attention of banks, and Chase is the latest organization to provide its own platform. According to a forecast by International Data Corporation (IDC), by 2017 the value of mobile payments will reach $1 trillion, and with Chase Pay the company is looking to grab a share while the technology is relatively early in its development.

Currently the biggest players in this segment are Apple, Samsung and Google, but as the technology continues to mature and the adoption rate increases, banks finally have come to terms with the long-term viability of this payment system.

To ensure rapid availability, Chase partnered with MCX, a mobile commerce solution with members across 110,000 locations. The members include retailers such as Walmart, Target, Best Buy, Shell and many others in big-box, convenience, pharmacy, fuel, grocery, quick- and full-service dining, specialty-retail and travel companies. The full membership base processes more than $1 trillion in payments annually.

“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,” said Brian Mooney, CEO of MCX.

As one of the biggest banks in the US, Chase has a large presence in the financial sector. With its Chase Pay platform it will further legitimize mobile payment as a solution customers can trust. The company has 94 million credit, debit and pre-paid card accounts and it is number one in total US credit and debit payment volume, with $707 billion in sales in 2014.

Chase Pay will give consumers a secure platform that uses tokenization technology for in-store, in-app and online purchases. It also allows loyalty programs and gives users the option of taking pictures of a receipt to make a payment in select locations.

For merchants, it provides fixed pricing with zero network, merchant processing and merchant fraud liability fees. And because it uses the same technology to scan gift cards, merchants won’t have to invest in additional hardware. Merchants that are not Chase Commerce Solutions client will also be able to participate in Chase Pay. The bank is partnering with 17 technology vendors to make that possible.

“Chase Pay solves a number of pain points for consumers and merchants. It will improve the customer experience and drive down the cost of payments,” said Gordon Smith, CEO of Consumer & Community Banking at JPMorgan Chase & Co. Smith made the announcement about Chase Pay at the Money 20/20 conference in Las Vegas.

Chase Pay will be available in mid-2016.

Edited by Kyle Piscioniere

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