Seven major banks, including Bank of America, JPMorgan Chase, Wells Fargo have reportedly partnered to launch a digital wallet that will compete with other third-party wallet providers such as Paypal and Apple Pay.
Major banks launch digital wallets
Bank of America, JP Morgan Chase, Wells Fargo, and the four other financial institutions behind payment network Zelle are collaborating to launch a digital wallet for consumers to use for online accounting, The Wall Street Journal reported Monday The company said.
The wallet will be managed by Early Warning Services (EWS), a fintech company that owns and operates Zelle; EWS provides risk management solutions to financial institutions, government agencies, and payment companies. It is co-owned by Bank of America, JPMorgan Chase, Wells Fargo, Truist, Capital One, PNC Bank, and U.S. Bank.
The new digital wallet will be linked to shoppers’ debit and credit cards for online payments and will operate separately from Zelle. The bank is concerned about losing control of its customer relationships and aims to compete with other third-party wallet providers such as Paypal and Apple Pay, the magazine reported, citing sources.
EWS plans to begin rolling out the new wallet later this year. Visa and MasterCard have already joined, and the fintech company has reached out to other card networks, including Discover Financial Services, to assess interest in adding cards to the wallet.
Bernstein analyst Harshita Rawat commented on the news in a note to clients Monday. She explained that the big banks “probably always envied Paypal,” adding that.
Building a two-sided network effect of payments to scale just takes a very long time, a great customer experience (not just similar, but better than the incumbents), and an attractive merchant value proposition.
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