The “Pay” market got even noisier in 2016, and no one is expecting the racket to lessen this year. Retailers, tech companies, group service providers and card issuers, all eager to participate in the digital payments revolution, continue throwing their hats into the mobile payments ring.
Citibank and J.P. Morgan Chase are among the most recent global banks to develop their own branded apps, competing with the likes of Apple Pay, Android Pay and Samsung Pay (not to mention others like Walmart Pay and Kohl’s Pay). Following Capital One and its Capital One Wallet into the digital-payments party, Citi and Chase will no doubt apply the lessons (and data) they’ve gleaned from engaging with consumers via banking apps to their mobile payment efforts.
Citi Pay, which offers online, in-app and NFC-powered in-store payments for Android device users, was made possible by the development of Host Card Emulation (HCE). HCE essentially removes the mobile network provider from the transaction. Mastercard also had a hand in helping the bank roll out its payments app, as Citi Pay transactions will ride Masterpass rails.
The Chase Pay setup is similar but appears to be more focused on the merchant relationship. The mega bank has said its payment app is “focusing on merchant needs first,” offering benefits like zero-fraud liability. From the consumer perspective, it is also device agnostic, whereas Citi Pay can only be used on Android devices. More phones equals more payment app users, and merchants probably don’t hate the sound of that.
Fragmented retailer acceptance of in-store mobile payments will continue to play a role in how successful these apps are with consumers. Perhaps that is why Chase has decided to put its attention where it has. In the meantime, community financial institutions may want to consider how their own mobile payment offerings compete as more options arrive on the scene.