Wells Fargo, Bank of America, JPMorgan Chase and four other banks are joining forces to launch a digital wallet that people can use to shop online. Such a wallet is tied to debit and credit accounts of users, while the application is the same for all banks, that is, when shopping online, customers will no longer need to enter their card details every time.
Transactions will be handled by Early Warning Services LLC, the company that operates the Zelle money transfer service.
According to an EWS spokesperson, the wallet, which does not yet have a name, will operate separately from Zelle. It is already known that the partners plan to start testing the new service in the second half of the year.
Banks expect to connect 150 million debit and credit cards to the service. At launch, any U.S.-based consumer who has used their card online in recent years and provided an email address and phone number will be eligible to participate in the program.
The scheme by which the application will work has not yet been disclosed: Most likely, the client will be able to enter his email on the checkout page. The merchant will ping the EWS, which will be able to connect to the bank to determine which consumer cards can be used for payment. The customer can then choose which specific card to use or opt out of the purchase.
The banks say that the reason for the innovation was the fight against fraudsters. However, according to WSJ sources familiar with the situation, the most important goal of the new service is to compete with third-party wallet operators such as PayPal Holdings Inc. and Apple Pay. Banks fear losing control over customer transactions. In particular, experts are sure that the biggest threat to banks is Apple Pay. The tech giant is already well advanced in financial services and is working on its own savings account and "buy now, pay later" offering.
