While PayPal and Apple Pay dominate the dematerialized payment solutions sector, the largest banks in the United States are getting organized to develop their own digital wallets. Bank of America, JPMorgan Chase or even Wells Fargo seek to maintain their influence over their customers to prevent them from moving towards competitors.
A bank-initiated digital wallet
In the United States, the country’s largest banks are coming together to develop a new service allowing consumers to pay online merchants using a digital wallet. Bank of America, JPMorgan Chase and Wells Fargo are accompanied by four other financial companies for the deployment of this future product.
The service will be operated by Early Warning Services LLC, a company owned by many US banks such as PNC Financial Services, US Bancorp and Capital One. Moreover, this product will be compatible with Visa and Mastercard payment companies : consumers will then be able to save their bank card details in this dematerialized wallet to make their daily purchases.
Through its positioning, this service competes head-on with similar pre-existing services on the market such as PayPal and Apple Pay. Since these two intermediaries reduce banks’ control over consumers and their fundsfinancial institutions have no choice but to develop a digital payment service in turn.
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A mixed future deployment?
The road is likely to be winding for such a product to establish itself in the market of digital wallets : while PayPal dominates in the field of dematerialized financial transfers, Apple Pay continues to increase its market share thanks to its partnership with the company Stripe and its recent collaboration with the investment bank Goldman Sachs last December.
When launching their product, the various banks expect 150 million credit and debit cards to link to the wallet. To access this service, future users must meet several conditions to be eligible for the service, such as:
- transmit an e-mail address and a telephone number;
- have already used their card for online purchases;
- be up to date with their payments.
While its deployment is scheduled for the second half of 2023, it remains to be seen whether online merchants will agree to use this new payment solution for their sales.. This is the problem facing the Bitcoin (BTC) network today: without the involvement of the various businesses, the popularization of a new payment service will always have a limited impact.
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Source: WSJ
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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