A host of major banks in the United States are collaborating on a payment wallet to facilitate online retail transactions driven by debit and credit.
Several large US banks are reportedly Planning a payment wallet to facilitate online purchases. These banks include Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM) and four other financial institutions. According to the Wall Street Journal, the group’s planned digital wallet service could compete with PayPal and Apple Pay.
As it stands, the big bank payment wallet still doesn’t have an official name. Independently, Early Warning Services LLC will manage the digital payment. EWC LLC is a bank owned company that operates the Zelle money transfer platform. Despite the perceived similarities between Zelle and the upcoming payment feature, the banks initiative will operate separately from Zelle.
Conclusions of the next digital wallet initiative of the big banks
The rollout of the new payment feature will begin in the second half of the year. This development means that shoppers will soon be able to pay at merchants’ online checkouts with wallets linked to debit and credit cards. Additionally, the wallet will launch with Visa Inc (NYSE: V) and Mastercard (NYSE: MA) debit and credit cards. However, the facilitators of the card launch also communicated the initiative to other card networks to gauge interest. These include Illinois-based financial services company and operator of Discover Bank, Discover Financial Services (NYSE: DFS).
A large number of financially driven platforms are responsible for the deployment of such a service. They include PNC Financial Services Group Inc (NYSE: PNC), US Bancorp (NYSE: USB) and Truist Financial Corp (NYSE: TFC). The banking consortium is still fine-tuning the details of the digital payment customer experience. The process is likely to involve consumers typing in their emails on a merchant’s checkout page. The merchant would then ping Early Warning Services to trace their back-end connections to the banks. The EWS process is intended to identify which of the consumer’s cards can be loaded into the wallet. After this process, consumers could choose which card to use or opt out.
Upon launch, banks expect to enable up to 150 million debit and credit cards within the wallet. Additionally, usage eligibility is derived from updated payments for cards used online in recent years. Additionally, US consumers who qualify for the cards at launch already have an email address and phone number.
Traditional banks recognize technological and fintech threats
According to inside sources, the stated goal of competing with PayPal Holdings (NASDAQ: PYPL) and Apple (NASDAQ: AAPL) is practical. The banks involved fear they could lose control of their customer relationships to payment schemes from the fintech pillar and the consumer electronics giant. Apple, in particular, poses a credible threat and is increasing its presence in major financial services. For example, the California-based multinational technology company works on a savings account with Goldman Sachs (NYSE: GS). Additionally, Apple is also reportedly planning to launch a buy now pay later (BNPL) offer at some point in the future.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify the crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
