JPMorgan Chase on Wednesday notified customers of its Chase Pay mobile payments solution that the service will soon be unavailable for in-store use, leaving a once-touted payments platform dead on a road already littered with failed products.
Starting in early 2020, Chase Pay customers will no longer be able to use the smartphone app at physical point-of-sale terminals, according to an announcement posted to the platform's dedicated website. Chase plans to continue processing purchases made online and through supported apps.
JPMorgan began to notify existing customers of the change via email, reports Bloomberg.
The demise of Chase Pay, at least in stores, ends a four-year experiment in mobile payments that began life in 2015 through a partnership with the Merchant Customer Exchange. At the time, Chase elected to integrate MCX's now-defunct CurrentC platform to create a smartphone app that replaced credit cards with scannable barcodes.
CurrentC failed to gain traction and was ultimately killed off after a brief beta period in June 2016. Nine months later, JPMorgan snapped up the platform and other FinTech assets from MCX.
"When we started this, it was four years ago -- the payment space has changed a lot over the period of time and customer behavior has changed," Chase Pay chief Eric Connolly told the publication. "A lot of merchants have shifted to buy online, pick up in store' and have invested in their online presence and their apps."
Chasing the money, Chase Pay is refocusing efforts on web and app payments. As noted by Bloomberg, however, an industry study by website PYMNTS.com estimates JPMorgan's solution was accepted by fewer than 1% of online merchants at the end of the June quarter. The bank believes Chase Pay will grow its share of the market and on Wednesday announced upcoming support from GrubHub and its portfolio company LevelUp, the Chase Center app and more than 60,000 merchants in the Big Commerce network.
"We continue to focus on our customers and they are using the Chase Pay button on merchant websites and in merchant apps, and now their tap-to-pay Chase cards more than ever," Connolly said in a prepared statement. "So, we're shifting our focus to expand Chase Pay's presence in more merchant apps and websites."
As competing payments platforms struggle to gain footing, Apple Pay continues to increase its slice of the market. Morgan Stanley analysts in July called Apple's solution "the clear leader among app/phone-based digital wallets," noting high year-over-year growth in online usage. While PayPal remains the transaction king in both number and volume, Apple Pay is slowly catching up.
Apple's payments strategy is expected to get a boost with the recent launch of Apple Card, a digital- and NFC-first credit card product that features deep integration with Apple Pay.