In this article, published in The Wall Street Journal, J.P. Morgan Chase, the nation’s largest bank by assets, is modifying its Chase Pay platform to compete with the likes of Apple Pay, Google Wallet, Android Pay, and PayPal. The move will allow Chase Pay cardholders to create a digital wallet and make payments in store, online and in app.

J.P. Morgan Chase Has an Advantage

According to the article, J.P. Morgan Chase currently supports over 94 million cardholders, giving the nation’s largest bank a distinct advantage. Having this large customer base makes the transition to digital wallet even more feasible. In an interview, cited in this article,  the head of J.P. Morgan’s consumer and community banking, Gordon Smith, said, “We’ve got the scale to bring an awful lot of customers”. This statement provides clarity into J.P. Morgan’s assessment of Chase Pay and the presumed scale that can be utilized for its success.

Retailers Are Ready For Chase Pay

Along with its large customer base, J.P. Morgan Chase also has a long list of business to business relationships that can make Chase Pay even more expansionary. By partnering with MCX, Merchant Customer Exchange, Chase Pay cardholders have instant access to a plethora of retailers. This allows cardholders to use their digital wallet to purchase goods and services through select retailers in store and online. The specific retailers involved can be found on this website.

Problems with Chase Pay

Traditionally, payment via digital wallet is processed by near field communication (NFC) technology, which is built into today’s latest smartphones and allows the consumer to wave his or her device at payment stations to pay for goods and services. According to this article, the only problem is that Apple does not allow third-party developers to utilize the iPhone’s NFC chip for app integration. This restricts J.P. Morgan Chase from accessing the NFC capability of iPhone’s in order for Chase Pay customers to pay using their Apple iPhone. The operations team at J.P. Morgan Chase is then forced to work around the situation to provide its Chase Pay cardholders with an efficient way to pay using the digital wallet on their smartphone.

QR Codes Solve The Problem

Instead of NFC, cardholders will be able complete transactions at retailers by using quick response (QR) codes. The mechanics behind QR codes are simple. The cardholder will open their Chase Pay app and generate a unique QR code on their smartphone and the cashier will scan it to complete the payment. Simple as that.

Chase Pay Will Take Over Digital Wallet Market

Since approximately half of American households are Chase customers, cited in this article, and J.P. Morgan Chase will automatically transfer cardholder information over to Chase Pay for current cardholders, then Chase Pay is in position to acquire a large share of the digital wallet market.