JPMorgan Chase, the nation’s largest credit card provider, said Monday that it will launch its own mobile payments platform to compete with major players already out of the gate, primarily Apple Pay.
It will allow Chase customers the ability to pay retailers using their smartphones in stores, and the banking giant has a prominent partner that ensures the system’s presence quickly across the nation at major retailers, including Walmart, Target, Best Buy and Shell.
Chase Pay will be available in mid-2016 to Chase customers, covering 94 million credit, debit and pre-paid card accounts. Chase is No. 1 in total U.S. credit and debit payment volume, with $707 billion in total sales in 2014.
Chase Pay will work with MCX (Merchant Customer Exchange), which is building the CurrentC infrastructure at big-box retailers, convenience stores, pharmacies, gas stations, groceries and specialty retailers.
Collectively, MCX-affiliated companies operate more than 110,000 locations and process more than $1 trillion in payments annually.
“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 is banking on its MCX partnership and the range and caliber of retailers associated with CurrentC to battle Apple Pay, Smith told Reuters. Chase was able to sign up MCX mainly by committing to cut retailers’ costs, Smith said. When a consumer pays with a credit card, the retailer pays fees to banks and credit card networks to process the transaction.
Meanwhile, Apple Pay’s growth has slowed a year after its launched, research released on Monday finds.
Fourteen percent of U.S. households with credit cards had signed up for the payment option by the end of September, up from 11 percent in February, Phoenix Marketing International said at the payments conference in Las Vegas.
“A very rapid initial threshold was achieved by Apple Pay and it is still growing but the growth rate has slowed down,” Greg Weed, director of card performance research at Phoenix, told Reuters.