Continuing with the strategy of divesting non-core operations, JPMorgan Chase (NYSE:JPM) has agreed to acquire MCX’s payments technology to help expand Chase Pay, its smartphone-based payment system which allows consumers to pay retailers using their devices.
JPMorgan has bragging rights as the first top-tier bank in America to come out with a branded digital wallet. Earlier in 2015, the lender managed to partner with Merchant Customer Exchange (MCX), a consortium of retailers which includes big players such as Wal-Mart, Target, Best Buy and Shell.
This time however, the New York-based financial giant seems much more interested in MCX ‘s technology than the partnership the two companies originally announced.
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Chase sweetened the deal for MCX member companies by offering reduced credit card processing fees, although just how reduced is still a matter of speculation. MCX’s network rings up more than $1 trillion of sales per year and have over 100,000 outlets.
The bank decided to introduce its own branded wallet sometime before the end of last year. It considers the offering to be a digital extension of current card relationships. It is pit against the digital wallets of Apple, Google and Samsung, all vying to replace the swipe of a payment card with the tap of a phone.
Jennifer Roberts, Head of Chase Pay said: “When we think about ‘fintech,’ we go through a ‘build/buy/partner’ evaluation to decide how we can get to market most efficiently. MCX has been an important partner, and their technology complements ours, so we’re thrilled to deepen our relationships with the merchant community through the purchase of this technology. This will help us get to market faster.”
“Consistent with our mission to provide secure, consumer friendly, and cost effective mobile payment solutions to the marketplace, MCX took advantage of this opportunity to have the solution expanded to the broader merchant community”, added Brian Mooney, CEO of MCX.