Chase Merchant Services has developed technology that could have helped its parent company, JPMorgan Chase, deal with the hefty task of reissuing 2 million cards in the wake of the massive Target data breach.

Chase's merchant services unit can automatically update the Chase cards stored in the Chase Wallet mobile app when those cards have to be reissued, eliminating the need to wait for and activate a mailed plastic card. The process works only for Chase Wallet users, making it an incentive to use the card that's stored in the Chase Wallet for one-off and recurring payments.

"The way it has worked in the past, you have to go and put the reissued card into every stored credential that you have," says Mike Passilla, CEO of Chase Merchant Services.

Passilla became CEO of the unit in the spring of 2013. Chase Merchant Services includes Chase Paymentech, Chase Offers and ChaseNet, which is part of the new merchant services partnership between Chase and Visa. Passilla spoke about his first year on the job in an interview with PaymentsSource on March 6.

"There are many innovations that are adding to the value proposition of payments, that are redefining what consumer behavior looks like and what a consumer should expect as an experience when they interact and transact in a physical, mobile or e-commerce environment," he says.

The mobile wallet reissuance project follows, but is not a direct response, to the series of recent data breaches at large retailers.

The bank's initial response to the massive breach of about 40 million payment cards used at Target stores was to temporarily limit debit card use. It soon joined the large number of banks and credit unions that chose to reissue their cards in bulk. Other possible or confirmed breaches followed at Neiman Marcus, Michaels, and Sears.

In the future, Chase Merchant Services wants the process of replacing cards to be painless for consumers, particularly in e-commerce venues.

"Making it happen on its own for the wallet increases the value proposition by improving the user experience," Passilla says.

Chase Merchant Services is also hoping to leverage its substantial trove of card user data to drive marketing, special offers and location-based services for merchants, Passilla says.

Card-linked offers, which are discounts tied to the use of payment cards, are increasing in popularity and can benefit from Chase's view of transaction histories and activities at specific merchants, Passilla says.

"We can draw insights that allow the most targeted, relevant use of an offer or an electronic coupon," he says. "It's not a prepaid offer program but a program that gets redeemed when the transaction takes place."

Like other companies that provide payment and merchant services, such as Capital One, Chase hopes to use the smartphone's embedded location technology to aid marketing. Consumers can receive a relevant, targeted offer when they are near a store, Passilla says. "And it's not just offers. Location-based technology can be used to help merchants make better informed decisions about utilizing their assets based on consumer activity."

Chase is not currently using Bluetooth Low Energy devices such as Apple's iBeacon to locate consumers within stores in real time, though Passilla is studying the technology.

"We look at any and all technology partnerships that would allow us to bring benefits to the market in a fast manner," he says.