The largest US banks are launching a digital wallet to compete with PayPal and Apple Pay

As financial institutions and organizations around the world are looking for innovative ways to improve their operations, for example through blockchain and cryptocurrency, many banking giants have enlisted the help of money transfer service Zelle to launch a digital wallet.

Yes, JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), Capital One Financial (NYSE: COF), US Bancorp (NYSE: USB), PNC Financial Services Group (NYSE) ): PNC) and Truist Financial (NYSE: TFC), plan to operate the portfolio in the second half of 2023, The Wall Street Journal Reported on January 23rd.

The wallet will operate separately from Zelle and will be operated by Zelle’s operator, the bank’s co-owned Early Warning Services (EWS), and is intended as an alternative to existing services such as PayPal (NASDAQ:PYPL), Apple Pay and Google Pay.

Digital wallet point of sale

Above all, the digital wallet of the future will not ask users to enter their card numbers, as is the case with other services, and this, banks expect, will reduce the risk of fraud and chargebacks that can cost merchants money, reputation and repeat business.

Specifically, users will only need to enter their email address during checkout, at which point the merchant will perform a ping via EWS, which in turn will contact banks to determine which user cards can be used with the wallet, allowing the user to then choose-in or opt-out of the purchase. .

In addition, the wallet will support 150 million debit and credit cards, focusing on US consumers who have been regular with their payments, used their card online in recent years, and provided a phone number and email address.

Currently, the digital wallet will work with Visa (NYSE: V) and Mastercard (NYSE: MA) credit and debit cards, while negotiations with other card networks, such as Discover Financial Services (NYSE: DFS), are still in the process.

Interestingly, Apple (NASDAQ:AAPL) has previously made a move deeper into the financial services sector, partnering with Goldman Sachs (NYSE:GS) to operate a savings account, as well as a “buy now, pay later” offering. .

Impact on PayPal’s price

Meanwhile, after Wall Street Journal When the report was released, PayPal shares briefly fell 2.76%, from $78.97 to $76.79, but have since recovered, at the time of publication trading at $78.90, according to data retrieved by Coinphony on Jan. 23.

PayPal 24 hour rate chart. Source: quinphone

Earlier, in 2022, the aforementioned banks considered a plan to allow the use of Zelle for online purchases instead of Visa and Mastercard amid concerns about fraud and the processing of disputed transactions. digital.

The largest US banks emerged after launching the digital wallet to compete with PayPal and Apple Pay first on Coinphony.

Leave a Reply

Your email address will not be published. Required fields are marked *