Chase Pay Signals an Overhaul of Phillips 66's Mobile Strategy

Phillips 66 is the third major merchant to come aboard for JPMorgan Chase & Co.’s upcoming launch of Chase Pay—alongside Starbucks and Shell Oil—and the byproduct of this deal is an overhaul of the gasoline and convenience retailer’s existing, relatively bland apps.

When Chase Pay goes live later this year, Phillips 66 will support mobile payments service through the Chase Pay app at its Phillips 66, Conoco and 76-branded fuel stations and stores. But the real power could come from making a vital connection within the app between payments and promotions, discounts and loyalty.

As part of its integration with Chase Pay, Phillips 66 is upgrading the three mobile apps associated with its brands—My Phillip 66, My 76 and My Conoco—so consumers using Chase Pay to check out can simultaneously learn about promotions, sign up for and earn Kickback Points through Phillips 66’s loyalty program and apply for a Phillips 66 credit card.

Phillips collaborated with Houston-based mobile app technology company P97 Networks Inc. to create the cloud-based mobile payments integration, the companies said in an Aug. 17 press release.

Chase Pay fills a void in Phillips' mobile strategy left by the Merchant Customer Exchange, a multi-retailer mobile wallet initiative that sunsetted its own mobile app efforts this year, but the coalition continues in strategic relationship with Chase Pay, according to the release. Phillips 66 joined MCX in 2013. Shell Oil also is an MCX participant.

Marrying existing loyalty and promotional tools with payments capabilities could be a huge boon to driving mobile app usage, analysts suggest.

"It's pretty clear at this point that simply using your phone to pay [minus more compelling features] is not enough of a benefit for most people to switch to a mobile payments app," said Aaron McPherson, an independent payments analyst, in an earlier interview discussing what may be required to drive usage of merchant-centered mobile payments apps. Integrating loyalty and coupons could be the missing link to getting consumers to change their habits, he suggested.

Phillips 66 clearly hopes to ignite that opportunity.

“This [integration] will allow customers to take advantage of our reward programs and promotions without having to swipe loyalty cards or use coupons at pumps and registers,” said Brian Mandell, Phillips 66’s global marketing manager, in the release.

Chase Pay is live with a handful of online merchants and Chase said it will be available later this year at participating merchants’ registers and apps, but no date has been announced for a broad rollout.