Bank of America, JPMorgan, others will reportedly work together on a digital wallet

0 9

Brendan McDermid | Reuters

Several banks are reportedly working on a digital wallet that connects to debit and credit cards, in an effort to compete with Apple Pay and PayPal.

According to The Wall Street Journal, the digital wallet would be run by Early Warning Services, a joint venture of several banks that also run Zelle. Among the major banks involved are Wells Fargo, JPMorgan Chase and Bank of Americaaccording to the report.

The new wallet would be launched first by Visa and Mastercard already on board, according to the report.

The move could be seen as an attempt to slow down growth Appleis pushing into consumer banking, as the tech giant already offers a branded credit card and is exploring other products for its famously loyal customers.

Shares of PayPal, whose core business is digital payments, were little changed on Monday after initially falling more than 2%.

Bernstein analyst Harshita Rawat said in a note to clients on Monday that “PayPal has always been the envy of the major banks” but that it would take time for the new wallet to pose a real threat to the incumbents.

“It just takes a very long time, a killer customer experience (which has to be better than the owners, not just the same), and a strong buyer value proposition to achieve two-way network effects.” raise a margin in payments to achieve scale,” Rawat said in the note.

The report follows a mixed earnings season for the big banks, with several CEOs, including Brian Moynihan of Bank of America, warning that the US is likely to see a recession. Bank stocks have struggled over the past year even as interest rates have risen, as fears of a recession and a slower investment banking environment have dampened gains in net interest income. to balance.

Read the full Journal story here.

— CNBC’s Michael Bloom contributed to this report.

Leave A Reply

Your email address will not be published.