A new issue in the banking technology race: major banks reveal a competing payment wallet to Apple Pay and PayPal!

Several major U.S. banks are reportedly planning a payment wallet to facilitate online shopping. These banks include Wells Fargo, Bank of America, JPMorgan Chase, 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.

For now, the big banks’ payment wallet doesn’t have an official name yet. Regardless, 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 future payment functionality, the banks’ initiative will operate separately from Zelle.

Takeaways from the big banks’ upcoming digital wallet initiative

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 online merchant checkouts with wallets linked to debit and credit cards. In addition, the wallet will be launched with Visa and Mastercard debit and credit cards. However, the facilitators of the card launch also shared the initiative with other card networks to gauge their interest. These include Discover Financial Services (NYSE: DFS), an Illinois-based financial services company and operator of Discover Bank.

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A host of financially oriented platforms are responsible for deploying said service. These include PNC Financial Services, US Bancorp and Truist Financial. The banking consortium is still working out the details of the digital payment customer experience. The process likely involves consumers entering their email address on a merchant’s payment page. The merchant then sends a message to Early Warning Services to track their connections to banks. The EWS process aims to identify the consumer’s card that can be loaded into the wallet. At the end of this process, consumers can choose which card to use or opt out completely.

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Upon deployment, banks plan to activate up to 150 million debit and credit cards in the wallet. In addition, eligibility for use stems from updated payments on cards used online in recent years. In addition, U.S. consumers who will be eligible for the cards when they launch will already have an email address and phone number.

Traditional banks recognize threats from fintech & Tech

According to inside sources, the stated goal of competing with PayPal and Apple is concrete. The banks involved fear losing control of their customer relationships to the payment systems of the fintech mainstay and consumer electronics giant. Apple, in particular, poses a credible threat and is increasing its presence in mainstream financial services. For example, the California-based tech multinational is working on a savings account with Goldman Sachs (NYSE: GS). In addition, Apple is also reportedly planning to launch a “buy now pay later” (BNPL) at some point in the future.

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