Working at a Deliberate Pace, Chase Pay Lines up HMSHost and Parkmobile

By Kevin Woodward
@DTPaymentNews

Chase Pay, the nascent mobile-payments service from banking giant JPMorgan Chase & Co., has added two more merchants to its roster. HMSHost, a Bethesda, Md.-based dining-services company specializing in transportation locations, and Parkmobile LLC, an Atlanta-based parking company, will begin accepting Chase Pay later this year, Chase says.

In addition to offering in-store barcode-based payments, Chase Pay also offers single-click checkouts for online and in-app transactions. Chase has steadily refined and added features to Chase Pay since its 2015 introduction. Most recently, it added an order-ahead capability based on functionality developed by LevelUp, a Boston-based mobile-payments and mobile-loyalty company.

HMSHost has operations in almost 2,000 locations in more than 80 North American airports and 99 roadside service centers. Chase Pay will be accepted at all HMSHost locations in the United States, with implementation in the majority of these locations expected by the end of 2017. HMSHost will install barcode scanners for Chase Pay transactions, a Chase spokesperson tells Digital Transactions News via email.

Parkmobile users will be able to pay for their parking using Chase Pay in the Parkmobile app. Chase is working to get the Parkmobile integration done as soon as possible, Chase says.

As with all Chase Pay transactions, those made at HMSHost and Parkmobile locations will be processed via ChaseNet, the bank’s closed-loop network that processes transactions from holders of Chase Visa-branded credit and debit cards when they make purchases at Chase Commerce merchants.

The ChaseNet network is a key advantage for Chase Pay because the network reportedly offers merchants lower acceptance rates. Just how much lower, however, is unknown because Chase does not disclose its pricing. “Equally important, Chase Pay transactions also provide added protection against both counterfeit and online fraud, reducing costs to merchants and hassle for customers,” the Chase spokesperson says.

The reduced fees act as a carrot for merchants, says Jordan McKee, senior analyst for mobile payments at 451 Research, a New York City-based information-technology research and advisory company.

“Given Chase’s multifaceted role across the payments value chain, it has the capacity to introduce a more favorable fee structure for merchants as compared to other wallet providers,” McKee says via an email. “Chase is wise to focus its partnerships on merchant segments characterized by a high degree of purchase frequency, such as food/beverage and parking. This will help to drive habituation across its user base.”

While Chase is making these moves, it still has to contend with the panoply of competing mobile wallets consumers and merchants can choose from.

“With the number of wallet options only continuing to grow, merchants will want to understand what incremental value accepting yet another mobile wallet will provide,” McKee says. “Digital merchants are becoming weary of turning their checkout pages into something of a NASCAR fender with assorted logos, making the case for integrating yet another wallet even more challenging. Consumers face a similar challenge in finding the signal through the noise when it comes to selecting a digital wallet.”

Issuers promoting their own wallets—including Citigroup’s Citi Pay and the Wells Fargo Wallet—face significant “headwind” from consumers, McKee says, especially when Apple Pay and Android Pay offer integration into a smart-phone operating system. Indeed, 451 Research’s Q3 2016 consumer survey found that more than 50% of consumers are unlikely to use or unsure about using a wallet provided by their primary card issuer, he adds.

For its part, Chase says the Chase Pay introduction—with Starbucks Corp. and Best Buy Co. Inc. locations among merchants currently accepting the payment method—is progressing as expected.

“Based on best practices for new, innovative apps, we are slowly rolling out the app and refining it before marketing the app broadly across the U.S.,” Chase says. “For this reason, we’ve intentionally limited marketing to targeted customers and certain markets as we continue to optimize the Chase Pay experience. Since launching in November 2016, results have been in line with expectations.”