J.P. Morgan Chase and Visa are entering into a partnership to develop a processing service where selected retailers give special discounts to Chase Visa cardholders that are applied at the time of purchase.
The ten-year partnership, called Chase Merchant Services, is trying to offer benefits to both the participating retailers and the cardholders. Chase may give lower processing fees to the merchants that take part in the program. Chase Visa cardholders save money by taking advantage of these discounted offers.
Chase can use its recent acquisition, online coupon site Bloomspot which it bought for $35 million in December, to offer credit card holders discounts to local shops.
J.P. Morgan Bank is the biggest U.S. lender by assets and is Visa's largest credit card issuer. The bank will license Visa's processing network, VisaNet, to create a service that processes transactions made with Chase Visa credit and debit cards, according to the Wall Street Journal. Chase will make deals with individual merchants to participate in the service.
Banks are trying to develop strategies for growth through digital payments as well as re-building or strengthening relationships with merchants after lawsuits and settlements over interchange fees.