Big Banks Join Forces on New Digital Wallet to Vie PayPal and Apple Pay
Seven big banks, including Bank of America, JPMorgan Chase, and Wells Fargo, have reportedly joined forces on the new digital wallet to compete with other third-party wallet providers such as PayPal and Apple Pay.
Early Warning Services (EWS) to Manage New Digital Wallet
The Wall Street Journal reported on Monday that Bank of America,
JPMorgan Chase, Wells Fargo, and four other financial institutions have joined
forces to launch a digital wallet for consumers on the online payment network
Zelle.
A fintech firm, Early Warning Services (EWS), owns and operates
the Zelle payment network and will manage the wallet. EWS provides risk
management solutions to financial organizations, government institutions, and
payment companies. It is co-owned by Bank of America, JPMorgan Chase, Wells
Fargo, Truist, Capital One, PNC Bank, and US Bank.
The new digital wallet, which will be linked to shoppers’ debit
and credit cards for online payments, will operate separately from Zelle. The
banking giants have teamed up to compete with other third-party wallet
providers such as Paypal and Apple Pay, fearing losing control of their consumer base, the
publication has reported.
New Wallet Launch Slated in the Second Half of 2023
EWS plans to begin rolling out the new wallet in the second half
of this year. While Visa and Mastercard are already on board, the fintech firm
has reached out to other card networks, such as Discover Financial Services, to
assess their interest in adding their cards to the wallet.
Bernstein analyst Harshita Rawat commented on the news in a note
to clients on Monday. She explained that the major banks have "always been
the envy of PayPal," adding:
"It simply takes a very long time, a killer customer
experience (which needs to be better than incumbents, not just similar), and a
compelling merchant value proposition to build the two-sided network effects in
payments to achieve scale."
What is your take on the big banks joining forces on the
new digital wallet to vie with PayPal and Apple Pay? Please post your
comments.
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