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Chase Pay Deal with Starbucks Strengthens the Bank's Mobile Muscle

Correction: Due to an editing error, Chase's relationship with the Merchant Customer Exchange was mischaracterized in an earlier version of this story.

Chase Pay, JPMorgan Chase's mobile wallet, has just landed an unlikely early partner with a history of going it alone: Starbucks.

The deal will incorporate Chase Pay into the Starbucks mobile app for payments at more than 7,500 Starbucks locations, starting in the fall. Starbucks' mobile app, which is largely developed and maintained in-house, is used for over 10% of its U.S. in-store sales.

That said, Starbucks also has a strong relationship with JPMorgan Chase. The companies previously partnered on a cobranded Visa credit card called Duetto, which launched in 2003 and shut down in 2010. More recently, Starbucks chose Chase as its processor for non-mobile payments after the coffee chain's relationship with Square began to phase out.

"We are really excited to be able to partner with Starbucks, we've had a long relationship with them and it is a terrific company," said Gordon Smith, CEO of consumer and community banking for Chase, during the bank's 2016 Investor Day presentation Feb. 23.

Consumers can use Chase Pay on Starbucks.com as well as within the mobile app to reload a Starbucks Card. The Starbucks app also supports Apple Pay as a funding method, despite Apple's wallet being a potential competitor to Starbucks' own mobile payment system.

Chase revealed in October 2015 that it entered a deal with the Merchant Customer Exchange to offer Chase Quick Pay within its developing CurrentC mobile wallet, which is still in a testing phase.

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