Chase to discontinue standalone Pay app, embed with merchants

Chase Pay, a standalone QR code-based payment app that connects to users’ card credentials, will be retired as of early next year, Eric Connolly, head of Chase Pay, said Wednesday in a statement.

JPMorgan Chase‘s decision to drop the standalone digital wallet, however, doesn’t mean it’s the end of Chase Pay. Instead, the bank will focus on embedding the Chase Pay button on merchant websites and apps. The move, according to a bank spokesperson, represents an evolution of the platform.

Rewards based on Chase Pay transactions will continue as incentives to grow adoption, with customers being able to take advantage of rewards from both Chase and merchant partners. “The standalone app will go away, but the option to pay with Chase Pay will continue,” the spokesperson told Bank Innovation.

Chase Pay currently is available on websites and in merchant apps such as those of Starbucks, Shell, United and Atom Tickets. Customers also can link Chase Pay to PayPal accounts and will soon be able to use the payment tool on Grubhub apps, its portfolio company LevelUp and with the more than 60,000 merchants on the Big Commerce network. Customers can take advantage of rewards from both Chase as well as merchant partners.

The move to fold Chase Pay into merchants’ buy buttons marks a renewed focus on retail partnerships. According to Connolly, the decision to discontinue the standalone Chase Pay app isn’t a shift in strategy, but an emphasis on where the bank sees consumer behavior moving and where merchants are investing. “We see our biggest opportunity in working with merchants to make it even easier for consumers to make purchases at merchants’ websites and their apps,” he said.

Chase Pay’s big-box merchant partners, including Starbucks, Walmart, ShopRite and Best Buy, originally were part of the Merchant Customer Exchange (MCX) network, which had a digital wallet of its own that was phased out in 2016 after poor adoption. Chase subsequently acquired the MCX technology, which supports Chase Pay.

Thad Peterson, senior analyst at Aite Group, said focusing on merchant buy buttons will enhance simplicity for the customer, who can just focus on Chase Pay as a buy button option instead of having to navigate too many options.

It does, however, add pressure on Chase Pay to differentiate from the numerous options already competing to become the customer’s primary payment method on merchant payment platforms. “Friction is failure, and anything a wallet provider can do to lessen the complexity of using their offering is a win for the issuer, the merchant and, ultimately, the customer,” said Peterson. “An additional buy button on merchant sites contributes to the ‘Nascar problem’ of too many payment alternatives at the moment of purchase. “