JPMorgan recently announced that it will be ceasing its Chase Pay technology and the payment method will be removed from all merchant apps and websites by the end of this month. This comes after a mediocre run since the product’s much publicized launch in 2015, and a gradual phase out that began in 2020, just over a year ago.
It was reported that the decision comes after the company acknowledged that acceptance of the product by merchants would not pick up as fast as expected. To put it into perspective, the multi-year effort to develop and market Chase Pay involved over $100 million in investment with minimal returns. Despite fierce competition, PayPal remains to be the preferred service for online retailers offering convenience of payment for consumers.
JPMorgan spokesperson Pablo Rodriguez said, “As technology has evolved, so has our strategy for integration at the merchant point of sale. We are incorporating the most popular features directly into the Chase mobile app and Chase.com,” including paying with points and logging receipts. According to Chase’s total list of retailers accepting the payment method, the most affected customers are those who transact with Shell, Starbucks, and Walmart.
While its website announced the closure of its service, Chase is recommending its customers use PayPal, saying “In preparation of Chase Pay no longer being available for use in PayPal, learn how to add your Chase cards directly to your PayPal account.” It appears Chase is conceding to PayPal after failing its goal in speeding adoption of its digital payment systems to challenge rivals, as Apple Pay and payment networks via Visa Inc., Mastercard Inc., and American Express Co., all pushed payment buttons of their own.
In 2019, the bank discontinued with offering its smartphone app to make payments at bricks-and-mortar stores after seeing customers preferring to use physical cards to pay in person. Fewer than 1% of online merchants accepted Chase Pay as of mid-2019 according to a study by pyments.com. PayPal, on the other hand, was accepted by 70% of merchants. Following its competitors, Chase has migrated proprietary systems for peer-to-peer payments to Zelle.
This move signals some banks throwing in the towel when it comes to competing with Apple, PayPal, Google, and Samsung on mobile payment share. Instead, JPMorgan will streamline its proficiencies and focus on the peer-to-peer market to remain competitive.