JP Morgan Chase & Co said on Monday it will soon launch its own competitor to Apple Pay that will allow consumers to pay retailers using their smart phones.
The largest U.S. bank is the latest company to try to profit from the commonness of smart phones, which many financial executives believe will one day be consumers' preferred way to pay for everything.
The companies that figure out how to convince consumers to stop pulling credit cards out of their wallets and start paying with their phones--earn vast sums by taking a percentage of the trillions of dollars--consumers spend annually.
Chase has signed a deal with the Merchant Customer Exchange, a group of major retailers including Wal-Mart Stores Inc and Best Buy Co Inc to accept payments through the bank's technology.
No clear front-runner has emerged in the business yet.
Chase believes its smart phone application, known as Chase Pay, has one key advantage: the calibre of retailers it has brought on board, Gordon Smith, chief executive of the bank's consumer business, told Reuters.
Retailers included in the Merchant Customer Exchange ring up more than $1 trillion of sales per year and have over 100,000 outlets.
Rivals like Apply Pay have struggled to sign up retailers to accept their payments.
Whenever a consumer pays for something with plastic, the retailer pays fees to banks and credit card networks to process the transaction.
Chase signed up the Merchant Customer Exchange mainly by promising to cut retailers' costs, Smith said.
Chase is willing to accept a lower fee for Chase Pay transactions than for other transactions, and hopes to make up the difference by getting more volume over its network, Smith said.
"As merchants give us more business, we will give them better pricing," Smith said in an interview.
Chase expects to market its product heavily in the middle of next year. Smith was speaking to retailers about Chase Pay at a conference in Las Vegas on Monday.
Chase Pay is also promising superior security, a critical selling point.
Chase Pay will initially work for consumers that already have Chase credit, debit, and prepaid cards, Smith told Reuters in an interview. The app will work on Apple and Android-based phones.
Chase Pay is just one of a series of companies trying to become the go-to payment technologies, including Apple Pay, Samsung Electronics Co Ltd's Samsung Pay, and Alphabet Inc's Android Pay.