Chase, MCX Team on a Pro-Merchant Mobile Wallet

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Most mobile wallets clearly favor one industry over another, with banks and retailers often pitted against each other in a battle over payment card fees. JPMorgan Chase just made a stunning move by conceding some of this ground to the benefit of the Merchant Customer Exchange.

Chase Pay, announced late Monday, gives merchants the one prize they have fought tooth and nail to get: a mobile wallet that doesn't lock them into paying excess fees.

"There’s no network fees, no merchant-acquiring fees, we will not charge them back for fraud once we’ve approved a transaction, and we will also give them the opportunity to drive down further their cost of acceptance based on how much volume they do with Chase," Gordon Smith, head of JPMorgan Chase's consumer bank, said in an interview with Bloomberg News.

The wallet will be linked to Chase's 94 million credit, debit and prepaid card accounts when it launches in mid-2016. Chase's announcement says only that it offers merchants "fixed pricing" and does not go into more detail on the what fees it still assesses for mobile payments.

Chase's partner, MCX, is a joint venture of the country's biggest retailers, including Walmart and Target. MCX has worked for three years to develop a mobile wallet of its own, called CurrentC, but is still in the testing stages.

The Chase announcement is also a concession on the part of the merchant venture, which once demanded exclusivity of its partners and has fought against sharing shopper payment data.

"This is a significant milestone, not just for MCX and Chase, but for mobile payments overall as the industry continues to take shape," Brian Mooney, CEO of MCX, stated in an Oct. 26 release from Chase. "Everywhere CurrentC is accepted, Chase Pay will be accepted.”

The partnership links Chase with the CurrentC network of retailers that process more than $1 trillion in transactions annually at more than 100,00 U.S. locations, Mooney said.

Chase Pay will also connect a merchant's loyalty program into the payment experience, and Chase will tokenize transactions for added security.

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