Dive Brief:
- Kroger announced it has partnered with Chase Pay to offer mobile payment in select stores and through online ordering, according to a company release.
- In an interview with Bloomberg, Kroger’s chief information officer, Chris Hjelm, said the company hopes to introduce Chase Pay in approximately 600 stores next year. He noted that the mobile wallet, which is available to JP Morgan Chase & Co.’s 65 million customers, utilizes the existing barcode system that Kroger stores currently have in place.
- “Technology is transforming our customers’ experiences and greatly influencing how we are reimagining the store of the future,” Hjelm said in the release. “Mobile wallets enable a more seamless shopping experience for our customers and at the same time, can help us drive cost out of our business.”
Dive Insight:
Kroger’s mobile payment partnership comes on the heels of similar announcements from its competitors, including Target and Aldi. Target recently enabled mobile payment through its app, linking its loyalty program as well as its Cartwheel discount program. Walmart, meanwhile, also accepts Chase Pay and has been expanding its own Walmart Pay program, as well as its Scan & Go express checkout app.
Looking closer, Kroger’s partnership with Chase is a money-saving endeavor. As Chris Hjelm told Bloomberg, Chase Pay uses the same barcode-scanning technology that Kroger currently utilizes, meaning the grocer doesn’t have to install a separate system like those that process Apple Pay or Google Wallet, which relies on what’s known as near-field communication, or NFC.
Savings aside, Kroger and other retailers may not experience the sort of customer adoption they’d like to see. Despite considerable investment from companies like Visa and Apple, mobile payment adoption has been slow to date, especially when compared to other countries. A tiny 0.5% of transactions made through Visa Inc.’s network comes through mobile wallets, watches and other “tokenized technologies,” Bloomberg noted.
Chase Pay, which JPMorgan Chase & Co. rolled out two years ago, has struggled to gain traction among mobile payment options. According to a survey from Bernstein Research earlier this year, just 6% of online shoppers said they’d used the program, placing it ninth among U.S. mobile wallets. Paypal, by comparison, was used by 61% of respondents.
According to The Wall Street Journal, JPMorgan Chase has spent $100 million developing Chase Pay to date..
Similar to online grocery shopping, mobile wallet adoption is low but growing quickly as consumers increasingly rely on their phones as commerce tools. For this reason, retailers and companies like JPMorgan Chase see mobile payment primarily as an investment in the future.
