Chase’s Quest to Be­come Stripe

It’s hard for a big bank to keep up with nim­ble new­com­ers. But Jpmor­gan Chase is de­ter­mined to be on the same level as Stripe and Brain­tree.

ISO & Agent - - INSIDE 11/12.2017 - BY JOHN ADAMS

Big banks aren’t al­ways seen as in­no­va­tors. But a se­ries of moves and in­vest­ments could change the way the pay­ments in­dus­try views Jpmor­gan Chase.

The big­gest in­no­va­tors in pay­ments aren’t nec­es­sar­ily banks, and that’s a prob­lem for Jpmor­gan Chase, which has such a large client base that ev­ery startup sees it as a tar­get. While banks took a back seat, tech­nol­ogy com­pa­nies like Stripe and PayPal’s Brain­tree swept in to work with the most am­bi­tious up­starts, in­clud­ing Lyft (Stripe) and Uber ( Brain­tree). Many com­pa­nies try to com­pete by be­com­ing the next Uber, but Chase doesn’t want to be the next Uber — it wants to be the next Stripe.

“You have Square, Stripe and Brain­tree in this mar­ket,” said Rich Aber­man, co-founder and chief strat­egy of­fi­cer of We­pay, which Chase is ac­quir­ing. As part of Chase, “we can now say we are the API layer to [4 mil­lion] small busi­nesses. That’s trans­for­ma­tive,” he said.

The bank’s ear­lier in­vest­ments have paid off in un­ex­pected ways. For ex­am­ple, the Chase Pay mo­bile wal­let is ac­tu­ally an in­car­na­tion of Chasenet, a project ini­ti­ated in 2013 in part­ner­ship with Visa. The re­sult is a sys­tem that sharply stream­lines the pay­ment process, im­prov­ing se­cu­rity while eras­ing costs, the bank has said.

The key to Chase Pay — and per­haps, to ev­ery­thing about Chase’s trans­for­ma­tion — is its scale. Chase Pay pro­vides the most ben­e­fits as a closed-loop network, when both the mer­chant and con­sumer are Chase clients. Chase’s plans for We­pay have to be just as am­bi­tious, with the bank’s 4 mil­lion small to medium sized busi­ness clients at stake.

“We see more busi­ness own­ers that want to have the pay­ments in­te­grated with the soft­ware that runs their busi­nesses. We want to be in po­si­tion to take ad­van­tage of that,” said Rob Cameron, Chase’s head of part­ner­ships for North Amer­ica and pres­i­dent of Canada for Mer­chant Ser­vices.

With its size, Chase can make deals quickly, whether it’s ac­quir­ing mo­bile wal­let tech­nol­ogy, in­vest­ing in small­busi­ness mo­bile mar­ket­ing, or buy­ing cloud soft­ware that will em­bed its Chase Pay app into small busi­nesses as part of a broader suite of on­line of­fer­ings.

Chase’s in­vest­ments have given it tech­nol­ogy from the for­mer Mer­chant Cus­tomer Ex­change, col­lab­o­ra­tive ac­cess to Levelup’s deals and We­pay’s ap­pli­ca­tion pro­gram­ming in­ter­face. All of these will power mar­ket­ing and pay­ments for small to medium sized busi­nesses, ac­cord­ing to Cameron.

“When you add Chase Pay to all of this tech­nol­ogy, a busi­ness can al­low peo­ple to pay with points at a small busi­ness through a mo­bile app, the same way they do at Star­bucks,” Cameron said.

We­pay will act as a re­fer­ral en­gine to spread ser­vices across a range of e- com­merce busi­nesses that could ben­e­fit from de­mo­graphic or ge­o­graphic syn­ergy.

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