According to the media, seven banks, including Bank of America, JPMorgan Chase, and Wells Fargo, plan to launch digital wallets in the second half of this year, and it is expected that 150 million debit and credit cards will be enabled when they are launched. Analysts believe it will be time before it poses a serious risk to incumbent players such as PayPal.
Payments giant PayPal and Apple’s service Apple Pay may be on the verge of a serious rival.
On Monday, January 23rd, Eastern Time, media reported that Bank of America, JPMorgan Chase, Wells Fargo and four other banks are studying the launch of a digital wallet that will link with the debit and credit cards of these banks, allowing shoppers to Pay merchants online.
The above-mentioned wallet will be managed by Early Warning Services LLC (EWS), a financial technology company owned by seven major U.S. banks, including U.S. Bancorp and Capital One Financial. It is planned to be launched in the second half of this year. It has no official name yet and will be independent of the transfer service under EWS Zelle runs.
The new wallet will initially be available on Visa and MasterCard debit and credit cards, EWS said, and the company is also approaching other credit card networks, such as Discover Financial Services. EWS also confirmed to other media that digital wallets will be launched this year.
Banks that support EWS expect 150 million debit and credit cards to be enabled by the new wallet when it becomes available. U.S. consumers who have used their bank’s credit card online in recent years and provided their email address and phone number will be able to get the wallet.
According to the media, people familiar with the matter revealed that the purpose of launching the new digital wallet is to compete with third-party wallet operators such as Apple and PayPal. Apple’s financial services sector poses a huge threat to the banking industry. Banks worry that without digital wallets, they will lose control of their customer relationships.
In June 2022, Apple announced the launch of Apple Pay Later, an installment payment financial service similar to Huabei. Goldman Sachs, the issuer of Apple Card, is also a partner. Goldman Sachs acts as the technical issuer of the loan and is the official sponsor of the adjustment of the Bank Identification Number (BIN), but the lending does not use Goldman Sachs’ decision-making and balance sheet.
Bernstein analyst Harshita Rawa commented in a note on Monday that big banks “may have been envious of PayPal,” but it will take time for new wallets to pose serious risks to existing players such as PayPal.
“Become a killer customer experience (better than existing experience, not just similar), and a compelling merchant value proposition, building programmatic two-way network effects in payments,” the report reads. , it will take a long time.”
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