Home News Big banks are creating a digital wallet to compete with Apple Pay

Big banks are creating a digital wallet to compete with Apple Pay

by SuperiorInvest

Bank of America (BAC), JP Morgan (JPM) and Wells Fargo (WFC) work on a digital wallet which can be used by customers to shop online in an effort to compete with Apple Pay and PayPal (PYPL).

Key things

  • Bank of America, JP Morgan and Wells Fargo are reportedly working on digital payment wallets.
  • Banks own the Zelle digital payments network and will expand its reach.
  • PayPal and Apple worked more closely together and increased their market share.

These banks will lead projects with the support of payment giants Mastercard (MA) and visas (AGAINST), according to the Wall Street Journal. The digital wallet will be operated by Early Warning Services LLC, a joint venture owned by the banks managing the Zelle Payments Network. The plan represents the banks’ first step into the digital wallet industry.

PayPal had more than 400 million active wallets in 2022, according to Statista, with year-over-year growth slowing since the pandemic began. Apple Pay has over 500 million active users despite having no support for Android mobile devices. 2% drop in PayPal stock price (PYPL) were watching the news, but it finally came to a head.

News follows recent news results season for big banks. Aggressive interest rate hikes by the Federal Reserve have boosted big bank profits, even as headwinds intensify. Higher rates lead to larger loan loss provisions, and the Federal Reserve is holding back on rate hikes that will erode earnings in the coming quarters.

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