Bank of America, JPMorgan and others are reportedly collaborating on a digital wallet

Brendan McDermid | Reuters

Several banks are reportedly working on a digital wallet that can be linked to debit and credit cards to compete with Apple Pay PayPal.

After The Wall Street Journal, the digital wallet would be operated by Early Warning Services, a multi-bank joint venture that also operates Zelle. The major banks involved include Wells Fargo, JPMorgan Chase and Bank of Americaaccording to the report.

The new wallet would initially be started with Visas and MasterCard already on board, according to the report.

Early Warning Services confirmed to CNBC that it plans to launch a wallet product this year.

The move could be seen as an attempt to slow down Apples foray into retail banking as the tech giant already offers a branded credit card and is exploring other products for its notoriously loyal customer base.

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 Monday that big banks “probably always had PayPal envy,” but that it would be some time before the new wallet posed a serious risk to incumbents .

“It just takes a lot of time, a great customer experience (which has to be better than incumbents, not just similar) and a compelling value proposition for merchants to build the two-way network effects in payments to scale,” Rawat said in the Note.

The report comes after a mixed earnings season for big banks, with several CEOs, including Bank of America’s Brian Moynihan, warning that the US is likely to experience a mild recession. Bank stocks have struggled over the past year, although interest rates have risen, as fears of a recession and a slower investment banking environment wiped out gains in net interest income.

Read the full Journal story here.

– CNBC’s Michael Bloom contributed to this report.

https://www.cnbc.com/2023/01/23/bank-of-america-jpmorgan-and-other-banks-reportedly-team-up-on-digital-wallet-to-rival-apple-pay.html Bank of America, JPMorgan and others are reportedly collaborating on a digital wallet

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