Chase Launches 'Chase Pay' Payments Service to Compete with Apple Pay

Chase Bank (NYSE:JPM) is rolling out its own digital wallet with the announcement of Chase Pay, an approach to pay by phone in person as well as in-app and online transactions.

Chase, the largest USA bank, believes Chase Pay has one key advantage: the caliber of retailers it has brought on board, Gordon Smith, chief executive of the bank's consumer business, told Reuters.

CurrentC is being developed by MCX (Merchant Customer Exchange), a consortium of a few of the biggest retailers in the US, including Wal-Mart, Target, Shell, Exxon, CVS, Dunkin Donuts and Sears.

Chase Pay will be based on CurrentC, a retailer-led mobile payment system that has largely been written off by Silicon Valley techies for its reliance on barcodes rather than the more sophisticated NFC (near-field communications) technology adopted by its competitors. However, an Apple executive announced earlier this month that Starbucks, KFC and Chili's restaurants have signed up, and Best Buy is now accepting Apple Pay in all of its 1,400 stores nationwide.

The new service will pit Chase Pay against new digital wallets from Apple, Google and Samsung vying to replace the swipe of a payment card with the tap of a phone. While Chase cards are compatible with these services, Chase has to compete with other banks inside these wallets to be the credit or debit card that a shopper ultimately chooses. Once available, CurrentC will be available as a payment option in all of these retail locations, as will Chase Pay. Similarly, Capital One recently announced its own mobile payment feature, even though it also plans to participate in Google's Android Pay. The study found that 64 percent of smartphone payment app users, or those interested in trying them, would consider downloading a bank's payment app. Only about half that number said they would consider trying Apple Pay or Android Pay.

Rivals like Apply Pay, which Apple launched in September 2014, have struggled to sign up retailers to accept their payments.

But while trials of the technology are ongoing, CurrentC has yet to launch - something that will need to happen before Chase Pay can get off the ground.