Digital wallets have been springing up almost everywhere, including Apple and Google's payment systems. This time, J.P. Morgan Chase is catching up on the scene, planning to rival Apple Pay with its Chase Pay digital wallet.
Currently, there's no front-runner yet when it comes to mobile payments, so everyone has a fair chance to grab the top spot at this point. With almost every person owning a smartphone, financial executives believe that digital wallets will be the preferred payment mode of consumers, from buying a carton of milk to booking a flight to a vacation destination.
Gordon Smith, J.P. Morgan Chase's CEO of consumer and community banking, unveiled the upcoming service at the Money20/20 event in Las Vegas. Compared to Apple Pay and Android Pay, Chase Pay doesn't use NFC technology to carry out transactions. Instead, it uses QR codes.
So far, the largest U.S. bank has garnered the support of plenty of major merchants, including Merchant Customer Exchange, which is a group of retailers that big stores such as Walmart and Best Buy belong to. In total, the Merchant Customer Exchange group has more than 100,000 outlets, and it can produce $1 trillion sales yearly. When Chase Pay rolls out, retail stores in the group will accept payments via the smartphone app.
J.P. Morgan Chase was able to sign the considerable deal because of its promise to cut down retailers' cost. Also, the bank aims to get merchants to eventually offer more discounts with Chase Pay, which could potentially increase the number of consumers willing to use the mobile payment app.
In contrast, Apple Pay still has to gain the endorsement of a lot more retailers if the Cupertino firm wants to get ahead. On the Apple Pay page, Best Buy is already under the "coming soon" list along with plenty of other retailers.
Initially, Chase Pay will work for consumers who already have Chase credit, debit and prepaid cards, according to Smith.
The winner of the competition depends on which firm can convince consumers to pay using their smartphones and gain the endorsement of retailers the most.
Chase Pay will be available on both iOS and Android smartphones, and the bank intends to market it sometime in the middle of next year.
