Banks teaming up to fight Apple Wallet & PayPal

AppleInsider

Seven major banks are working with money-transfer service Zelle to create a separate digital wallet system to compete with Apple Wallet.

According to the Wall Street Journal, banks including Wells Fargo, JP Morgan Chase, and Bank of America are planning a new system for using online shopping using a digital wallet that is linked to their credit and debit cards. It's Apple's Wallet, but not including Apple, and the intention is to begin rolling it out in the second half of 2023.

Instead, the new digital wallet is to be run by Early Warning Services (EWS), which is firm owned by banks and currently operates the Zelle service. EWS says the as-yet unnamed new wallet will be separate from Zelle.

Unnamed sources say that the new wallet is also intended to compete with PayPal. It is being built in order to prevent banks ceding customer relationships to big tech, like Apple.

It's also a move to cut down on fraud, which Zelle has reportedly been prone to. A plan to extend Zelle into online purchases was cancelled over fraud and disputed transactions.

Details of how the new system will work are still being worked on. The Wall Street Journal says that it is likely to involve users typing their email address into a merchant's checkout page. That merchant could then contact EWS, which in turn confirms with the banks, and the customer's relevant cards are then presented.

EWS plans to initially launch the service supporting Visa and Mastercard, for a total of around 150 million customers. If the system proves popular, it may expand into allowing direct payments from banks to merchants.

Apple Wallet already has a competitor in the form of Google Wallet. In theory, Meta and Samsung are competitors in the space too, but neither has much market traction.

Similarly, a consortium of firms including JP Morgan Chase previously attempted to supplant Apple Pay with CurrentC, a rival that ultimately failed.

Read on AppleInsider

red oak

I have used Zelle.   It is awful.   This effort has zero chance of success.   0% 

“Details of how the new system will work are still being worked on”.   Lol.   And they plan to launch it “this year”.   What bizarre, parallel world do these people live in?   

thedba

red oak said:

I have used Zelle.   It is awful.   This effort has zero chance of success.   0% 

“Details of how the new system will work are still being worked on”.   Lol.   And they plan to launch it “this year”.   What bizarre, parallel world do these people live in?   

They live in the world where they ultimately control everyone's transactions. 

Now granted Apple isn't doing this out of the goodness of their hearts either.

However when I choose to use Apple Pay, I can more or less be sure of the privacy of that transaction. 

kelemor

And what hardware are they going to put it on……they making there own NFC dongle…..

badmonk

Yes users WILL LOVE giving up their email addresses to merchants so they can be bombarded with spam.

The other thing to know about Zelle is once it is sent, there is no way to recall the payment if subsequent fraud or a simple mistake occurs unlike a standard credit card transaction.

lorca2770

"A plan to extend Zelle into online purchases was cancelled over fraud and disputed transactions."
Indeed!

tpurdy

From what I understand, the company responsible for Zelle (Early Warning Systems or something like that) was created with representation from the big 5 banks + capital one (maybe some more) as a result of the 2008 financial crisis to create technology that would help avoid the same problems in the future. Soooo naturally it turned into something else - Zelle - which totally sucks. 

sbdude

Good for them. If they get enough users, maybe that will take the heat off Apple Pay.

auxio

thedba said:

red oak said:

I have used Zelle.   It is awful.   This effort has zero chance of success.   0% 

“Details of how the new system will work are still being worked on”.   Lol.   And they plan to launch it “this year”.   What bizarre, parallel world do these people live in?   

They live in the world where they ultimately control everyone's transactions. 

Now granted Apple isn't doing this out of the goodness of their hearts either.

However when I choose to use Apple Pay, I can more or less be sure of the privacy of that transaction. 

It's not about altruism. The difference is that you can be sure it was designed by a company which truly understands technology and how to design things the right way for the long term. As opposed to companies (banks) which simply throw money at a problem, but have no expertise in anything other than managing money. The vulture tech contractors who come for the money will be gone as soon as it runs out, and they'll be left with a half-baked, proprietary solution with no support, just like much of the tech used in the financial industry.

edited January 2023

larryjw

Sure! Bank execs coming together over $300 bottles of wine with their 26 yo sugars by their side are going to come up with something that will rival Apple. 

msak

I hope this doesn't mean that those banks planning to use this new system means they won't be supporting the Apple Wallet any more as this would mean a very discombobulating experience for Apple end-users. Imagine Card A is in the Apple Wallet which you double-click to get to, but Card B is in X Wallet which you have to launch an app to use. That just makes me want to throw out the whole digital wallet concept and not use it. 

Right now, some stores like Harris Teeter (a grocery store) has its own wallet and if you want to pay by your mobile phone, that is the only way it would accept digital credit or debit cards. I've hated it and do not use their wallet. 

A fundamental reason I don't use Harris Teeter's own wallet system (or any other app's wallet system) is because you actually have to store your actual credit card number with them. F**K that! That's just another layer of weak security. In the days of early internet, I would store my credit card info with merchants, but no longer. Have we not learnt that these systems are not that secured? Apple's Wallet system, at least for the Apple Card, doesn't store the actual credit number, so there's some layer of protection there.

edited January 2023

narwhal

Too many cooks -- it's doomed to fail. But I'm guessing the banks are nervous about Apple's and Google's digital wallets someday replacing them. I suppose if Apple and Google add loans and investments to their wallets, brick-and-mortar banks won't have much purpose.

larryjw

narwhal said:

Too many cooks -- it's doomed to fail. But I'm guessing the banks are nervous about Apple's and Google's digital wallets someday replacing them. I suppose if Apple and Google add loans and investments to their wallets, brick-and-mortar banks won't have much purpose.

I have my bank and credit union cards in my Apple Wallet in addition to my Apple Card. All work just fine. The banks involved with this Apple "competitor" want something more than they already have -- some connection with Zelle -- which both my bank and credit union already offer -- just not via their plastic. 

I can't image that their new proposed offering will amount to anything special. As it is, they already have on their plates their implementation of FedNow and the proposed Fed's CBDC (central bank digital currency). 

sconosciuto

Let's see... trust Apple with my financial info and transactions, or trust a coalition of banks who have all already proven themselves utterly untrustworthy... who wish to leverage their names and reputations (LOL) to promote this new entity but have set up this new entity expressly for the purpose of shielding themselves from any financial or legal fallout from misdeeds and incompetence.

Hard pass. I'll continue to trust the company that has earned my trust and is willing to risk its name over its trustworthiness.

edited January 2023

sconosciuto

I use Zelle only because customers and some friends prefer it; if they want to give me money, who am I to dictate to them how they should do it?

 I hate it. It's kludgy and risky. Apple Pay in my Wallet is easy as pie, I don't see how the banks are going to beat Apple on this one. It has taken me no time at all to do all my transactions with Apple Pay, other than the handful like Target that make you pay thru their own app and the cheap mofo's who refused to buy the contactless terminals. I put up with that because 5% back; why on Earth would I bother with whatever kludgy crap these banks come up with, which won't beat the 2% or 3% back I get from AC and will surely be more difficult to use than Wallet.

edited January 2023

itguyinsd

sconosciuto said:

I use Zelle only because customers and some friends prefer it; if they want to give me money, who am I to dictate to them how they should do it?

 I hate it. It's kludgy and risky. Apple Pay in my Wallet is easy as pie, I don't see how the banks are going to beat Apple on this one. It has taken me no time at all to do all my transactions with Apple Pay, other than the handful like Target that make you pay thru their own app and the cheap mofo's who refused to buy the contactless terminals. I put up with that because 5% back; why on Earth would I bother with whatever kludgy crap these banks come up with, which won't beat the 2% or 3% back I get from AC and will surely be more difficult to use than Wallet.

How do you pay friends with Apple Pay and have the ability to transfer that to a bank account?  Since you're comparing Zelle to Apple Pay, I assume there is a way to do that?  

edited January 2023

itguyinsd

badmonk said:

Yes users WILL LOVE giving up their email addresses to merchants so they can be bombarded with spam.

The other thing to know about Zelle is once it is sent, there is no way to recall the payment if subsequent fraud or a simple mistake occurs unlike a standard credit card transaction.

Same with Venmo.  No recourse under most circumstances of getting scammed.  PayPal, for physical items, you have some protection, but not for payment of services.
The convenience of these services, though, is for friends/family to send money to each other.  You can't really do that with a credit card.  I can perform a service for a client and they pay me with Zelle which instantly appears in my bank account.  

entropys

larryjw said:

Sure! Bank execs coming together over $300 bottles of wine with their 26 yo sugars by their side are going to come up with something that will rival Apple. 

Indeed, a room full of sociopathic MBAs. Which reminds me, how come Epstein’s client list hasn’t been released?

on this Zelle update that is not called Zelle, why in the hell would customer want to participate in a system that requires your email address to function? You wouldn’t of course. What it really means is you have to have an account with the merchant, or franchise or whatever.  What that means in a practical sense is that the participating retailer is of a decent size and has a customer tracking capability. Little guys are out or have to pay for a service delivered by some third party.

This is not in the interests of users. Or small business.

edited January 2023

filemakerfeller

This has the smell of CurrentC and I predict a similar fate for it.

bonobob

badmonk said:

The other thing to know about Zelle is once it is sent, there is no way to recall the payment if subsequent fraud or a simple mistake occurs unlike a standard credit card transaction.

This is why they set up Zelle in the first place--to limit their own liability in cases of fraud.  Zelle is not a bank, so does not have to follow banking regulations like actual banks do.

igorsky

ITGUYINSD said:

sconosciuto said:

I use Zelle only because customers and some friends prefer it; if they want to give me money, who am I to dictate to them how they should do it?

 I hate it. It's kludgy and risky. Apple Pay in my Wallet is easy as pie, I don't see how the banks are going to beat Apple on this one. It has taken me no time at all to do all my transactions with Apple Pay, other than the handful like Target that make you pay thru their own app and the cheap mofo's who refused to buy the contactless terminals. I put up with that because 5% back; why on Earth would I bother with whatever kludgy crap these banks come up with, which won't beat the 2% or 3% back I get from AC and will surely be more difficult to use than Wallet.

How do you pay friends with Apple Pay and have the ability to transfer that to a bank account?  Since you're comparing Zelle to Apple Pay, I assume there is a way to do that?  

Paying your friends is as easy as sending them an iMessage; couldn't be easier.