William Gallagher
Seven major banks are working with money-transfer service Zelle to create a separate digital wallet system to compete with Apple Wallet.
According to the Wall Street Journal, banks including Wells Fargo, JP Morgan Chase, and Bank of America are planning a new system for using online shopping using a digital wallet that is linked to their credit and debit cards. It's Apple's Wallet, but not including Apple, and the intention is to begin rolling it out in the second half of 2023.
Instead, the new digital wallet is to be run by Early Warning Services (EWS), which is firm owned by banks and currently operates the Zelle service. EWS says the as-yet unnamed new wallet will be separate from Zelle.
Unnamed sources say that the new wallet is also intended to compete with PayPal. It is being built in order to prevent banks ceding customer relationships to big tech, like Apple.
It's also a move to cut down on fraud, which Zelle has reportedly been prone to. A plan to extend Zelle into online purchases was cancelled over fraud and disputed transactions.
Details of how the new system will work are still being worked on. The Wall Street Journal says that it is likely to involve users typing their email address into a merchant's checkout page. That merchant could then contact EWS, which in turn confirms with the banks, and the customer's relevant cards are then presented.
EWS plans to initially launch the service supporting Visa and Mastercard, for a total of around 150 million customers. If the system proves popular, it may expand into allowing direct payments from banks to merchants.
Apple Wallet already has a competitor in the form of Google Wallet. In theory, Meta and Samsung are competitors in the space too, but neither has much market traction.
Similarly, a consortium of firms including JP Morgan Chase previously attempted to supplant Apple Pay with CurrentC, a rival that ultimately failed.
Chip Loder
Malcolm Owen
Mike Wuerthele
28 Comments
I have used Zelle. It is awful. This effort has zero chance of success. 0%
“Details of how the new system will work are still being worked on”. Lol. And they plan to launch it “this year”. What bizarre, parallel world do these people live in?
And what hardware are they going to put it on……they making there own NFC dongle…..
Yes users WILL LOVE giving up their email addresses to merchants so they can be bombarded with spam.
The other thing to know about Zelle is once it is sent, there is no way to recall the payment if subsequent fraud or a simple mistake occurs unlike a standard credit card transaction.
"A plan to extend Zelle into online purchases was cancelled over fraud and disputed transactions."
Indeed!