Banking giant JPMorgan Chase announced plans to enter the mobile payments market at the Money20/20 conference in Las Vegas on Monday.
Gordon Smith, head of consumer and community banking at Chase, revealed plans to partner with MCX, a firm that is preparing an alternative to contactless payment systems. Walmart is itself utilizing MCX as the mammoth retailer leads the charge against contactless payment, and is partnering with Best Buy, Kohl’s, and Sonoco for the purpose. MCX uses QR codes in its system, which is scheduled to launch next year.
QR codes are not very popular with tech firms, and both Google and Apple chose contactless payment for their own services. Samsung Pay uses MST (magnetic secure transmission) for payments, which allows retailers to use their normal cash reader to support the service.
Chase Pay will only work inside stores that are partnering with MCX, and some retailers might not support the mobile payments service, forcing users to download MCX’s CurrentC app. To make it even more frustrating, only Chase credit/debit cards will be supported on the digital wallet.
Chase claims it will offer merchants lower transaction fees if they support Chase Pay, which could be enticing for some retailers. The Chase Pay app will be available on iOS and Android at launch, but Smith did not specify a date.
The digital wallet is focused on Chase customers who regularly use their credit/debit card. It is less of a competitor to Apple Pay or Android Pay, since it is not looking for bank support or going out of its way to gain retailer support for the service. Chase hopes that MCX will do most of the heavy lifting on the support side.
Chase might be on the wrong side of the battle for mobile payment services however, with consumers already taking an interest in contactless technology. Meanwhile, QR codes have not been popular since BlackBerry Messenger decided to scrap them, and in early tests appear to be less accurate and less secure than contactless payment.
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