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JPMorgan Chase Co.’s Chase Pay mobile wallet, probably the most ambitious bank-operated U.S. mobile-payments service, on Wednesday announced it has signed up Phillips 66 Co., which sells gasoline under the Phillips 66, Conoco, and 76 brands, and will accept Chase Pay at its pumps and in its stores.
No date has been set yet for the program to begin, a Chase spokesman tells Digital Transactions News.
The deal will bring the fledgling Chase Pay wallet, which up to now has worked online with select merchants, to another major brick-and-mortar merchant. It also represents the second time a big-name petroleum merchant has adopted a third-party mobile wallet, following ExxonMobil Corp.’s adoption of Apple Pay in its SpeedPass+ app in March. Chase Pay will enable payments through Phillips 66’s My Phillips 66, My Conoco, and My 76 mobile apps, according to the Wednesday announcement. Phillips 66 has a network of branded marketers and dealers that operate approximately 7,500 U.S. locations, according to the company’s 2016 Fact Book.
Brian Mandell, global marketing president for Phillips 66, said in a statement that Chase Pay will offer customers a “simplified fueling experience” that will let them buy gasoline on their mobile phones “from the comfort of their vehicles.” The new program will also incorporate the petroleum company’s consumer offers. “This same convenience will allow customers to take advantage of our reward programs and promotions without having to swipe loyalty cards or use coupons at pumps and registers,” Mandell said.
Chase clearly sees an opportunity to strengthen ties to Chase cardholders who also buy gas and other products at Phillips 66 outlets. The banking giant announced last fall, when it introduced Chase Pay, that it would auto-load its 90 million credit and debit card accounts into the new wallet. “Chase Pay will help deepen the relationship with our common customers by integrating Phillip 66’s loyalty offers and rewards with payments to deliver a seamless experience,” said Tom Nipper, executive director of global enterprise solutions for Chase Commerce Solutions, in a statement. Chase Commerce Solutions is the bank’s merchant-acquiring arm.
Behind the scenes, Phillips 66 and Chase Pay will rely on cloud-based technology from Houston-based P97 Networks Inc. to enable payments at the pump and in stores. A 4-year-old company that specializes in payments for petroleum marketers, P97 also works with MasterCard Inc.’s Masterpass digital wallet and with ZipLine, a provider of decoupled debit programs that operates the SmartPay mobile-payments service for petroleum retailer Cumberland Farms, which has 600 locations in the Northeast.
The Chase Pay-Phillips 66 deal represents major milestones for both entities. It is Chase’s first major brick-and-mortar acceptance deal for Chase Pay since June, when Shell Oil Co. agreed to accept the wallet and fold its Fuel Rewards loyalty program into it. Chase said at the time that potentially 14,000 Shell stations could accept Chase Pay. In February, coffee kingpin Starbucks Coffee Co. agreed to start taking the wallet at its 7,500 company-operated stores in the United Sates by year’s end.
For Phillips 66, the deal is one of the first fruits of a tie-up between Chase Pay and Merchant Customer Exchange LLC, a retailer-controlled mobile-payments consortium that announced in October it would work with Chase’s wallet. Both Phillips 66 and Shell are among the 40 major retail brands that belong to MCX.
Phillips 66’s loyalty program may prove to be a crucial component of the deal with Chase Pay. Mobile-wallet users are increasing in number but using the products less often because of a perceived absence of consumer value, according to a study released Wednesday by Javelin Strategy & Research, a Pleasanton, Calif.-based payments-research firm.
Javelin found that by 2015, 21% of smart-phone owners on average had adopted a mobile wallet from a merchant, bank, or one of the so-called Pays (Apple Pay, Android Pay, Samsung Pay), nearly twice the 11% adoption rate found in 2013. But over the same period monthly usage per user had dropped from 3.7 transactions to 3 transactions.
