Inside JPMorgan Chase's biometric payment journey

Michael Nagle/Bloomberg

Making payments and accessing loyalty perks in a multichannel environment can require complex steps such as inputting mobile numbers, accessing a mobile wallet or scanning QR codes, a cumbersome experience that J.P. Morgan Payments says can be upended by using biometric technology.

JPMorgan Chase recently expanded its partnership with fintech PopID to bring biometric payments to fast food chain Whataburger. The move is part of a wider expansion of the $4.1 trillion bank's omnichannel strategy designed to reduce friction, said Prashant Sharma, executive director of biometric payments at J.P. Morgan Payments.

The bank is tying the usage of biometrics to payments, where uptake of the technology has lagged other uses, by offering it as a way to make shopping and checkout easier.

"Biometrics is an add-on to our omnichannel solution, and the idea behind biometrics is, 'How do we elevate that consumer journey to the next level?'" said Sharma, adding current processes for payments "add to a lot of friction.

"And what does this friction cause? It causes long lines. It causes people to just leave the store. It makes people go to a different merchant who can provide a much more streamlined journey."

PopID — which works with more than 380 retailers in California, Florida, Illinois, Indiana, Louisiana, Texas and Washington — estimates that biometrics technology decreases transaction times by up to 90 seconds and increases ticket size by 4%.

Once consumers upload images of their faces to PopID's cloud, they are able to pay for purchases and participate in the San Antonio-based fast food chain's loyalty program using PopID hardware. PopID's technology is merchant agnostic, meaning that once a customer is enrolled, they can use the technology at any participating retailer.

While PopID stores the biometric information and owns the relationship with the customer, J.P. Morgan Payments provides "the power … the safety, security and reliability of the bank" to the merchant, Sharma said, specifically compliance controls, security and privacy.

The expanded partnership comes on the heels of a May 2023 proof of concept pilot at the Formula 1 race at Miami International Autodrome, and was followed late last year with a separate pilot program at a JPMorgan office cafeteria operated by food concession stand operator Aramark.

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Biometrics is not a new technology. Consumers use it to unlock their cell phones, interact with mobile banking apps and even go through the U.S. Customs and Border Protection's Global Entry when returning from international trips.

But fostering adoption for a new payment type can be an uphill battle, said Tony DeSanctis, senior director at Cornerstone Advisors.

"Anytime you're talking about a new payment type it becomes a challenge, because the key adoption drivers are not only the consumers, but the merchants," DeSanctis said.

Simply put, merchants must adopt the new technology in order for consumers to be able to use it. Merchant adoption "is always going to be a challenge with new payment types, especially when you have to install technology and the merchant has to pay for it," DeSanctis said.

Consumer adoption could be even more difficult from both a security and use case perspective, DeSanctis said. "Will consumers take the time to set up a bio ID and link a credit card or debit card with financial information to a company they may not have heard of? And if they do, what use cases make the most sense?"

"If you think about it as a phased evolution where the merchant and consumer adoption converge in a way that's most beneficial to both, a place like Whataburger makes sense — it's a quick service restaurant with high turn and high frequency transactions," DeSanctis said.

J.P. Morgan Payments operates in over 160 countries and more than 120 currencies, and in 2023 posted $18.3 billion in revenue excluding equity investments, an increase of 31% from about $14 billion in 2022, according to the bank. The bank is "very much focused from a starting perspective on verticals where we see major pain points" including quick service restaurants, Sharma said.

Stadiums and sporting events are also areas that J.P. Morgan Payments is keeping an eye on because they represent multiple use cases, he said, noting the biometrics could be used for entry into the stadium or for age verification to buy alcohol.

"Technically, [biometric payments] works across all verticals, so there are additional functionalities we want to develop as part of the product," Sharma said.