JPMorgan Chase has announced it will soon launch an app, Chase Pay, that will allow users to pay retailers using their smartphones in stores.
By next July, JPMorgan's customers will be able to pay at more than 100,000 stores across the US by displaying a code on their phone that can be scanned by the cashier.
The bank believes its smart phone application will have a key advantage over the competition, including Apple Pay, because of the caliber of retailers it has brought on board, Gordon Smith, chief executive of the bank's consumer business, told Reuters.
JPMorgan has signed a deal with the Merchant Customer Exchange, a group of major retailers accounting for about $1 trillion (£650 billion) of annual spending by consumers that includes Wal-Mart Stores and Best Buy.
Meanwhile Apple Pay, launched just over a year ago, is struggling to gain traction. In June, Reuters interviewed the top 100 US retailers and found that two-thirds said they did not plan to accept Apple Pay this year.
Lowering retailers' costs
JP Morgan signed up the Merchant Customer Exchange mainly by promising to cut retailers' costs, Gordon Smith said. "As merchants give us more business, we will give them better pricing."
David Robertson, publisher of the Nilson Report, which tracks the card business, told the Financial Times JPMorgan's bid matters to players throughout the industry because of how many cardholder and merchant customers the bank has. "The whole thing is about scale, and Chase is a titan," Robertson said.
This announcement comes after the banking giant posted lower-than-expected profits for the third quarter of the year. It had a net income of $6.8 billion, up from $5.5 billion during the same period last year. It earned $1.32 a share, which missed analysts' estimates of $1.37 per share.
In addition, the bank said that net revenue declined by 6.4 per cent. It was $23.5 billion this quarter, down from $25 billion the year before. It also reported that sales of its loan products had increased by 15 per cent year-on-year.
The bank has been hampered by weak demand for loans and low interest rates, which have remained near zero since 2008.
JP Morgan's chief executive Jamie Dimon said in a statement: "We had decent results this quarter.
"We saw the impact of a challenging global environment… We continue to focus on our commitments, optimise our balance sheet and manage our expenses."
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