Swiped

Big banks plan a digital wallet to rival Apple Pay as plastic-free payments take over

Tuesday, January 24, 2023 by Robinhood Snacks |
No wallet, no problem (Duane Prokop/Getty Images)

No wallet, no problem (Duane Prokop/Getty Images)

Forgetting the CVV digits… Big banks are joining forces to launch a digital wallet that could rival Apple Pay and PayPal and allow their 150M+ card holders to check out online without grabbing their plastic. Banks have teamed up before: in 2017 JPMorgan Chase, Wells Fargo, Bank of America, and others launched peer-to-peer payment biz Zelle — which surprisingly moves more $$ than Venmo and Cash App combined. Now…

  • Same squad: Big banks are planning a digital wallet that’ll be run by Early Warning Service, the bank-owned company that runs Zelle.
  • Fresh wad: It’ll start as an online checkout option (with a physical card for in-store purchases), but could eventually work as a swipe-less wallet à la Apple Pay.

Tap-to-pay anxiety… Banks are wor­ried about los­ing customer loyalty as companies like Apple and PayPal promote their own financial products (Apple’s even working on a savings account with Goldman Sachs). Apple Pay has surged in popularity since its 2014 launch: an estimated one in six US consumers uses it at least once a month. Meanwhile, PayPal has 400M+ global users and controls over a third of the online payment market share.

THE TAKEAWAY

If you can't beat ’em, join ’em… or at least launch a competing product. With deal revenue shrinking, it’s more important than ever for banks to keep their retail customers loyal — especially at the digital checkout aisle. Over half of US consumers tried a new payment method last year, with many using digi-wallets for the first time. The global contactless payment market is forecast to quintuple by 2030.