Chase's experience with Chase Pay is likely a key factor driving its latest digital efforts, including its deal to purchase WePay
The biggest innovators in payments aren't necessarily banks, and that's a problem for Chase, which has such a large client base that every startup sees it as a target.
While banks took a back seat, technology companies like Stripe and PayPal's Braintree swept in to work with the most ambitious upstarts, including Lyft (Stripe
) and Uber (Braintree
). Many companies try to compete by becoming the next Uber, but Chase doesn't want to be the next Uber — it wants to be the next Stripe.
"You have Square, Stripe and Braintree in this market," said Rich Aberman, co-founder and chief strategy officer of WePay, which Chase is acquiring. As part of Chase, "we can now say we are the API layer to [4 million] small businesses. That's transformative," he said.
The bank's earlier investments have paid off in unexpected ways. For example, the key to Chase Pay — and perhaps, to everything about Chase's transformation — is its scale.
Chase Pay provides the most benefits as a closed-loop network, when both the merchant and consumer are Chase clients. Chase's plans for WePay have to be just as ambitious, with the bank's 4 million small to medium sized business clients at stake.
"We see more business owners that want to have the payments integrated with the software that runs their businesses. We want to be in position to take advantage of that," said Rob Cameron, Chase's head of partnerships for North America and president of Canada for Merchant Services.
With its size, Chase can make deals quickly, whether it's acquiring mobile wallet technology,
investing in small-business mobile marketing
, or buying cloud software
that will embed its Chase Pay app into small businesses as part of a broader suite of online offerings.
"When you add Chase Pay to all of this technology, a business can allow people to pay with points at a small business through a mobile app, the same way they do at Starbucks," Cameron said.