NEW YORK Visa and JP Morgan announced a huge deal this afternoon that will promote discounts for JP Morgan cardholders at merchants across the country, the first deal of its kind.
The unprecedented deal is expected to drive large new volumes of cards transaction to JP Morgan, already the nation’s biggest card issuer.
Under terms of the deal, JPMorgan Chase will launch Chase Merchant Services, a payments platform powered under license by Visa’s VisaNet that JPMorgan Chase will use to differentiate its cards for its merchants and cardholders, Visa explained in a news release this afternoon. The platform will process transactions initiated with JPMorgan Chase-issued Visa cards at merchants that JPMorgan Chase enrolls in Chase Merchant Services.
JP Morgan, which owns Chase Paymentech, the nation’s biggest merchant acquirer, will be able to negotiate deals directly with retailers and potentially offer lower fees that merchants pay to accept cards. The bank plans to distribute offers to cardholders through participating merchants that would be applied when a customer pays for a purchase.
“Chase Merchant Services enables us to build direct relationships with merchants and give enhanced benefits, such as targeted offers and discounts to Chase Visa cardholders,” said Gordon Smith, CEO of Consumer & Community Banking, JPMorgan Chase.
Under the deal, JPMorgan Chase will launch Chase Merchant Services, a payments platform powered by VisaNet the bank will use to create more differentiated experiences for its merchants and cardholders. The platform will process transactions initiated with JPMorgan Chase-issued Visa cards at merchants that JPMorgan Chase enrolls in Chase Merchant Services.
Chase Merchant Services combines the capabilities of JPMorgan Chase’s acquiring business, support functions and extensive card portfolio with a customized processing solution that Visa and JPMorgan Chase will create using Visa’s network, VisaNet.
As part of the agreement, JPMorgan Chase also will shift additional credit and debit card volume to Visa, driving more transactions on the Visa network.
“This effort with JPMorgan Chase is one example of Visa’s increased flexibility and desire to partner with financial institution and merchant clients to provide greater service to cardholders through tailored and value-added solutions,” said William Sheedy, group president, Americas, Visa.