JP Morgan Chase 2015 Annual Report Download - page 33

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You can rest assured that we continually
and vigorously analyze the marketplace,
including FinTech companies. We want to
stay up to date and be extremely informed,
and we are always looking for ways to
improve what we do. We are perfectly
willing to compete by building capabilities
(we have large capabilities in-house) or to
collaborate by partnering.
Whether we compete or collaborate, we
try to do what is in the best interest of
the customer. We also partner with more
than 100 FinTech companies – just as we
have partnered over the past decade with
hundreds of other technology providers. We
need to be very technologically competent
because we know that some of our competi-
tors will be very good. All businesses have
clear weak spots, and those weaknesses will
be – and should be – exploited by competi-
tors. This is how competitive markets work.
One of the areas we spend a lot of time
thinking and worrying about is payments.
Part of the payments system is based on
archaic, legacy architecture that is often
unfriendly to the customer.
How do you intend to win in payments, particularly with so many strong competitors — many
from Silicon Valley?
Right now, we are one of the biggest
payments companies in the world (across
credit and debit cards, merchant payments,
global wire transfers, etc.). But that has not
lulled us into a false sense of security – and
we know we need to continue to innovate
aggressively to grow and win in this area.
The trifecta of Chase Paymentech, ChaseNet
and Chase Pay, supported by significant
investment in innovation, has us very excited
and gives us a great opportunity to continue
to be one of the leading companies in the
payments business. Let me explain why.
Chase Paymentech. We already are one of the
largest merchant processors in the United
States (merchant processors provide those
little machines that you swipe your card
through at the point of sale in a store or
that process online payments). We are
quickly signing up large and medium-sized
merchants – this year alone, we signed
up some names that you all recognize,
including Starbucks, Chevron, Marriott,
Rite Aid and Cinemark. And I’ve already
described how the partnership with Busi-
ness Banking makes it easier for small busi-
nesses to connect with Chase Paymentech.
In all these instances, we have simplified,
and, in some cases, oered better pricing,
as well as made signup easier – exactly
what the merchants want. And very often it
comes with … ChaseNet.
ChaseNet. ChaseNet, through Visa, allows us
to oer a merchant dierent and cheaper
pricing, a streamlined contract and rules, and
enhanced data sharing, which can facilitate
sales and authorization rates. Again, these
are all things merchants want. (You can
see that we are trying hard to improve the
relationship between banks and merchants.)
We expect volume in ChaseNet to reach
approximately $50 billion in 2016 (up 100%
from 2015), as we have signed up and are
starting to onboard clients such as Starbucks,
Chevron, Marriott and Rite Aid. In conjunc-
tion with Chase Paymentech and ChaseNet,
both of which allow us to oer merchants
great deals, we also can oer … Chase Pay.
Chase Pay. Chase Pay, our Chase-branded
digital wallet, is the digital equivalent to
using your debit or credit card. It will allow
you to pay online with a “Chase Pay” button
or in-store with your mobile phone. We also
hope to get the Chase Pay button inside
merchant apps. Chase Pay will oer lower
cost of payment, loyalty programs and fraud
liability protection to merchants, as well
as simple checkout, loyalty rewards and
account protection to consumers. As one great
example, Chase has signed a payments agree-
ment with Starbucks, which, we hope, will
drive Chase Pay adoption. Customers will be
able to use the Chase Pay mobile app at more
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