Banking Kingpin Chase Prepares an ‘Aggressive’ Push for Its Own Digital Wallet
By John Stewart
Another 800-pound gorilla will soon be promoting a digital wallet, only this time it’s not a technology firm. It’s JPMorgan Chase & Co., a world leader in payment card issuance and merchant acquiring.
“We’re launching our own wallet. You’ll be hearing a lot more about it,” Mike Passilla, chief executive of merchant services at Chase, on Wednesday told high-ranking acquiring executives during a panel discussion at the Electronic Transactions Association’s Strategic Leadership conference in Scottsdale, Ariz.
Passilla said little more about the product, but on Tuesday Marianne Lake, chief financial officer at the money-center bank, told stock analysts during an earnings call that the new wallet, called Chase Pay, “will be launched more broadly this year.”
Passilla, who runs ChaseNet, the bank’s in-house issuing and acquiring network, indicated Chase will be pushing the new product hard with merchants. “Our focus is going to be about driving acceptance of this wallet,” he told the audience. “We’re going to lean into this in a very aggressive manner. We’re betting a ton on mobile.”
He added that while the bank is launching its own wallet, it will continue to push to get its cards into third-party products. “We’re launching this wallet and making sure we’re on top of other wallets,” he said. Last year, Chase was one of the first banks to connect to Apple Inc. to allow its cardholders to use Apple Pay.
Passilla said Chase’s interest in a proprietary mobile wallet was kindled by its dominant position as both an issuer and, through its Chase Paymentech processing unit, acquirer of card payments in the United States. Currently, some 20% of all U.S. credit and debit card transactions take place on Chase cards, he noted. The bank also claims 21 million active mobile-banking customers. “We’re going to be aggressive in this [digital] space because of our scale,” Passilla told the audience.
Passilla also said ChaseNet, which debuted two years ago as an effort by the bank to create a closed-loop merchant network for its cardholders, is making steady progress, though he did not reveal details. “Merchants are buying into the closed-loop platform,” he said. “It’s above plan, I wouldn’t say in record numbers, but above plan.”
As of January, ChaseNet was processing for 60,000 merchants that were generating $16 billion in annual card volume. ChaseNet merchants include United Airlines, the Marriott hotel chain, DirecTV, 1-800 Flowers, Groupon, Zillow, and Barnes & Noble as well as Square Inc., which funnels transactions to Chase Paymentech.
Before joining Chase in the spring of 2013, Passilla ran U.S. Bancorp’s Elavon merchant-acquiring unit. He spoke as part of a four-person panel at the conference, which wraps up Thursday.