Big Banks to Launch Apple Pay Competitor in 2023 H2

digital payment

America’s biggest banks are reportedly launching a digital wallet to take on Apple and PayPal.

The banks are developing a product that will let consumers make online purchases with a wallet tied to their Visa or Mastercard debit or credit cards, The Wall Street Journal reported Monday (Jan. 30).

The still-unnamed wallet will be managed by Early Warning Services (EWS), which also runs the money-transfer service Zelle, the report said. EWS tells the WSJ that the new wallet — due to arrive in the second half of the year — will function separately from Zelle.

Sources familiar with the matter told the WSJ one of the goals of the new wallet is to compete with third-party wallets like Apple’s Apple Pay and PayPal as banks worry about losing their grip on customer relationships.

EWS is owned by a group of seven banks: Wells Fargo, Bank of America, JPMorgan Chase, Citi, U.S. Bancorp, Truist and PNC. PYMNTS has reached out to EWS for comment but has not yet received a reply.

According to the WSJ, the banks expect to make 150 million debit and credit cards available for use within the wallet when it launches. Consumers who are caught up on payments and have used a card online in recent years will be eligible after providing their email and phone number.

The WSJ report points to Apple’s ongoing push into financial services. The company has been deepening its partnership with Goldman Sachs, and last year debuted a savings account for Apple Card users that lets them save cash rewards in a high-yield Goldman Sachs account.

Meanwhile, research from a PYMNTS study from the 2022 holiday shopping season found that the use of Apple Pay for online transactions grew 63% year over year as shoppers increasingly looked to brands that offer quick, convenient transactions.

And PYMNTS’ August Mobile Wallet Adoption study found that, among consumers who used a mobile wallet in the preceding 24 hours, 41% said that at least once in the last month they had chosen a specific merchant because they could pay with their preferred wallet.

One place Apple Pay has lagged, however, has been in the realm of in-store purchases. Research by PYMNTs last year found that in-store usage of Apple Pay was languishing, despite the fact that more than 75% of major U.S. retailers accept the wallet, and close to half of all American consumers carry an iPhone.