Chase enters crowded mobile wallet space, rounding out its mobile strategy
Chase has announced that it will be developing Chase Wallet and a new checkout experience called Quick Checkout, which will let merchants offer one-click checkout for consumers on mobile and desktop. Chase had already partnered with Isis, but this new branded wallet shows that the bank is even more invested in the space.
“This represents a significant step into mobile commerce for Chase and further demonstrates its commitment to the channel as an important engagement tool for customers,” said Jeff Crawford, manager at First Annapolis Consulting, Annapolis, MD. “In addition to its banking app offering, Chase has announced participation in the Isis mobile wallet, thus with this announcement, they have mobile offerings for customer in banking, physical retail payment and remote retail payments.
“On the surface this means more competition and potentially a more complicated landscape for customers, i.e., more choices without clear visibility about how to differentiate offerings,” he said. “ However, in the long run, this is a significant step forward by the No. 1 issuer, which is likely to raise consumer awareness.
“More participation by leading payments providers with a vested interest in offering customers a safe, convenient way to pay with their mobile phones is a positive step for the industry and consumers.”
Mr. Crawford is not affiliated with Chase. He commented based on his expertise on the subject.
Chase declined to comment for this story.
Chase announced the new payment innovations at JPMorgan Chase’s annual Investor Day presentation earlier this week. The company announced that Chase is investing in a tokenization solution for online and mobile payments to make transactions more secure.
Additionally, Chase will roll out Chase Wallet and Quick Checkout to make online and mobile shopping easier. Chase cardholders will be able to place all of their credit cards, including non-Chase cards, in the Chase Wallet, and new Chase card information will automatically be updated within the wallet.
Consumers can also pay with Ultimate Rewards credit card points via Quick Checkout.
Quick Checkout will also save time by auto-filling shipping address, address changes and new card numbers.
Merchants on the new ChaseNet platform will be able to integrate the Quick Checkout so that consumers can check out with one click. This will lead to shorter checkout times and lower cart abandonment as well as reduced fraud costs.
These merchants will also be able to provide targeted offers based on customer behaviors and specific purchase history.
The ChaseNet platform is currently in pilot mode with select merchants, and according to Chase, the system is tested and scalable.
According to Chase, Quick Checkout takes around 30 seconds compare to the average online/mobile checkout time of two minutes.
The mobile wallet space continues to expand with both branded and third-party options.
For instance, Accenture recently launched a new mobile wallet platform that allows banks, mobile operators and merchants to create their own solution.
Some of the brands that already have their own mobile payment solutions include Starbucks and Dunkin’ Donuts. At the same time, Google Wallet, Isis and others are taking a stab with their own mobile wallets.
While the options are increasing every day, consumer adoption is still struggling since paying with a physical card requires about the same effort as paying with a smartphone. Chase is trying to increase adoption with mobile wallets, but it remains to be seen whether or not they can take the lead.
According to Ovum’s Consumer Insights Survey, 43 percent of respondents chose banks as their most trusted mobile payments service provider, followed by credit card companies at 13 percent, online payment providers at 9 percent and mobile operators at 6 percent.
“We believe Chase is well-positioned as a competitor in the mobile wallet space,” Mr. Crawford said. “In addition to their card issuing expertise and large base of customers, Chase, like other financial institutions, has an advantage as a provider when it comes to payments and consumer trust and preference.
“Like any other mobile wallet provider, Chase will have to focus on ensuring that payments are safe, secure, and also convenient for its customers,” he said. “Generally a transaction process that requires more steps that existing methods today will be a tough sell for customers, and recent payment data breaches have brought security to the forefront for consumers.
“Perhaps just as important will be focusing on building merchant acceptance, without which utility of wallet for customers is severely limited.”
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York