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Banks working on a digital wallet to vie with Apple Pay

Jan 23, 2023
Illustration of a phone with a mobile payment icon on the screen, unzipping to show cards and money inside.

Illustration: Gabriella Turrisi/Axios

A consortium of big banks is working to roll out a digital wallet to compete with PayPal and Apple Pay, the Wall Street Journal reports.

Why it matters: With tech companies like Apple getting into financial services, banks are looking to launch more tech-friendly products for users.

Details: Wells Fargo, Bank of America, JPMorgan Chase and four other banks are collaborating on the digital wallet, which would link to users’ debit and credit cards and ease online checkout at merchant websites.

  • The product would be managed by Early Warning Services, the bank-owned technology provider behind peer-to-peer money transfer service Zelle.
  • But the new digital wallet, which the banks are hoping to launch in the second half, would operate separately from Zelle.

Context: The product would compete with popular one-click checkout services like PayPal and Apple Pay, which store user credentials in a browser or mobile device and enable users to pay online merchants without entering credit or debit card information.

  • The launch comes as Apple, in particular, is looking to expand its financial services offerings in partnership with Goldman Sachs.
  • The tech giant is working on offering bank accounts and has plans to launch a BNPL product called Apple Pay Later.

Of note: Launched a little over five years ago, Zelle has 110 million users and is available to customers at over 1,700 financial institutions, EWS CEO Al Ko told Axios last September.

The intrigue: Zelle has become popular for P2P payments, but it's come under scrutiny from the Consumer Financial Protection Bureau and Sen. Elizabeth Warren (D-Mass.) over fraud perpetrated through the network.

  • In response, its bank owners have recently discussed creating a playbook for reimbursing consumers that fall prey to scams that lead to illegitimate transfers.

What we’re watching: Though the digital wallet would launch with debit and credit card support, banks could offer other options, such as payments made directly from user bank accounts.

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