Chase Pay Brews up Starbucks Deal
In the battle for mobile wallet supremacy, JPMorgan Chase this week got venti-sized boost in the form of a partnership with Starbucks. Under terms of the deal—announced this week at Chase’s Investor Day—Starbucks will accept Chase Pay for purchases at its more than 7,500 U.S. locations and will integrate Chase Pay as a funding source for the prepaid card stored in its Starbucks mobile app—widely considered the gold standard of retail loyalty apps.
First announced at Money20/20 last October, Chase Pay is expected to launch by mid-2016. Chase already landed a major partner in MCX, the consortium of leading merchants behind the CurrentC mobile payments app. Under that pact, Chase Pay will be accepted at MCX’s more than 100,000 member retail locations and within the CurrentC app. Landing Starbucks represents another milestone for Chase Pay, which faces stiff competition in the mobile wallet space from the likes of Apple Pay, Android Pay and Samsung Pay, along with bank-backed services including Capital One Wallet, which was unveiled just weeks before Chase Pay.
Starbucks’ mobile app accounts for about 21 percent of the company’s U.S. sales transactions. Last fall, the company added a new order- and pay-ahead feature, which quickly grew to 6 million transactions a month by the end of the year, according to the company.
The Chase Pay integration also represents the latest step in cooperation between the two companies. In October, Starbucks announced that Chase Commerce Solutions—the processing arm of JPMorgan Chase—would process non-mobile payments at its stores, a service previously provided by Square. Chase and Starbucks also partnered on a co-branded rewards card, known as Duetto, from 2003 until 2010.