Chase Pay signals the next step of bank's Walmart relationship
Furthering a relationship that placed Walmart on the closed-loop ChaseNet processing platform, Walmart has committed to accepting the Chase Pay mobile wallet in its stores and in-app.
Chase Pay is built on ChaseNet, giving merchants a way to lower their card processing fees when accepting payments from JPMorgan Chase-issued card accounts. It operates by keeping the whole transaction on Chase's network, removing the third parties that are typically involved in open-loop card payments.
The agreement also follows Chase's pact with the Merchant Customer Exchange joint venture of which Walmart was a key player, setting the stage for Chase Pay to come to several MCX merchants such as Best Buy. Chase's pitch was hard for merchants to ignore, offering an arrangement with no network fees, no merchant-acquiring fees and no fraud chargebacks on any transaction that Chase approved.
Walmart is also working to expand its own Walmart Pay app by joining the list of retailers that accept Chase Pay as a funding source in-app.
"We are excited about the opportunity to provide our customers with even greater convenience and value to our Walmart Pay app while expanding our relationship with Chase," Mike Cook, senior vice president and assistant treasurer at Walmart, stated in a Nov. 3 press release. "Adding Chase Pay as an option with Walmart Pay and online will create an enhanced experience for our customers."
In addition to what had become an obvious eventuality in Walmart bringing Chase Pay into its fold because of the processing deal, the two mobile payment apps operate on similar technology through the use of QR codes and scanners. That should make it easier for Walmart customers to initiate transactions through either app at the point of sale.
While Walmart continues to engage in legal and competitive skirmishes with Visa, the move to Chase Pay gives Walmart stronger footing at the negotiating table in that it provides the one thing Walmart has long desired: cheaper Visa payments.