The Wall Street Journal reported Monday the upcoming launch of a digital wallet. The Bank of America, JPMorgan Chase, Well Fargo, and various other financial institutions behind the network Zelle are working together for the launch of a digital Zelle wallet.
The management of the wallet will be under the wings of a fintech firm, Early Warning Services (EWS). Which is the owner and operator of Zelle. Financial organizations, governmental agencies, and payment firms can benefit from the risk management solutions offered by EWS. Along with Bank of America, it is partially owned by JPMorgan Chase, Wells Fargo, Truist, Capital One, PNC Bank, and U.S. Bank.
Why is Network Zelle involved, and how will the digital wallet work?
It will be linked to a shopper’s credit or debit card for the purpose of online payments. However, it will be operating entirely separately from Zelle. According to the journal, banks fear losing control of their client relationships. As a result, they want to compete with some other third-party wallet providers like Paypal and Apple Pay.
The plan is to introduce the new digital Zelle wallet in the second half of 2023. The credit card giants Visa and Mastercard are on board with the plan, while the fintech firm is reaching out to various other networks to seek their interest.
The Bernstein analysis Harshita Rawat replied to clients’ comments on the news report. Harshita Rawat mentioned that central banks have “likely always had Paypal envy.”
Establishing the two-sided network effects necessary for payments to scale takes a long time, an excellent consumer experience, and a compelling merchant value offer.