JPMorgan Chase & Co. will shut down its Chase Pay mobile app in early 2020, the bank's third about-face on digital offerings since June.
Customers will no longer be able to use Chase Pay with their smartphones when shopping in stores, but they will be able to continue using it to shop online or in the mobile apps of retailers that accept it. This move closes the door on a four-year endeavor, but Eric Connolly, head of Chase Pay, said the company's strategy has not changed.
"Our goal is to provide value to consumers and our merchant clients through the combination of our retail, card and merchants services businesses," the executive said in an emailed statement.
Use of the Chase Pay button online and directly in merchant apps has seen double-digit growth for the last three years, Connolly said. Customers will soon be able to use Chase Pay in the Grubhub Inc. app. Connolly declined to say how many online retailers currently accept Chase Pay, but the service is available in merchant apps such as Starbucks Corp. and United Airlines Holdings Inc., among others.
Chase Pay has faced competition from rival mobile payment services provided by Apple Inc., Alphabet Inc.'s Google LLC, Samsung Electronics Co. Ltd. and branded retail apps. Chase Pay accounted for less than 5% of mobile payments purchases at in-store checkouts, according to a recent S&P Global Market Intelligence analysis. That number falls between 5% and 10% below mobile payment usage of Apple Pay, Google Pay and Samsung Pay. PayPal Holdings Inc. dominates the peer-to-peer sector, accounting for 70% of total usage, the study showed.
JPMorgan has been aggressively spending on technology, with $11.5 billion planned for 2019. But the banking giant also appears more willing than other banks to cut its losses and shift tactics.
In June, JPMorgan shut down Finn, its digital banking app aimed at millennials, after a year of experimentation. In July, the bank scrapped a four-year partnership with online lender On Deck Capital Inc. Since 2015, Chase has white-labeled OnDeck's platform-as-a-service solution, meaning it uses OnDeck's online platform to originate some of its own loans.
JPMorgan has also tested technologies in new areas. In February, it became the first major U.S. bank to launch a prototype cryptocurrency, called JPM Coin, that it hopes will change the way companies make payments across borders.
