Dive Brief:
- JPMorgan Chase is closing its stand-alone Chase Pay app early next year, the bank said Wednesday. However, customers will still be able to use Chase Pay on the websites and apps of stores where they shop. New merchants, including Grubhub, will be accepting the platform in the coming months, the head of Chase Pay said.
- The bank aims to muscle in on a market dominated by PayPal. Fewer than 1% of online merchants accept JPMorgan's digital wallet, according to a PYMNTS.com, compared with about 70% for PayPal.
- The about-face on Chase Pay marks the bank's third reversal on its own digital initiatives in the past three months, according to Bloomberg.
Dive Insight:
The online payments market — and customer behavior — have changed in the four years since JPMorgan Chase launched the app, said Eric Connolly, the head of Chase Pay. "A lot of merchants have shifted to 'buy online, pick up in store' and have invested in their online presence and their apps," he told Bloomberg.
JPMorgan Chase spends $11 billion a year on technology, the bank said. But it also isn't afraid to scrap projects and partnerships it feels aren't working. It shuttered its digital banking app Finn in June, about a year after its launch. Millennials, toward whom the branch-less experiment was aimed, didn’t necessarily want a separate digital experience, company spokesman Pablo Rodriguez said, adding that the bank’s consumer unit was equipped to handle that customer base.
JPMorgan Chase ended its three-year small-business loan partnership with OnDeck the following month, saying it would forge ahead in the market using its own platform.
Meanwhile, the bank is throwing its considerable tech spend behind a prototype digital coin and an initiative to make its payment cards contactless. The bank said in February it had successfully tested JPM Coin, which it hopes will speed up payments between companies. JPMorgan Chase also wants to convert its card portfolio to tap-and-go by year’s end.
Chase has 51 million active digital customers, the bank said in its statement.
