The major American banks, including Bank of America, JP Morgan Chase and Wells Fargo plan to introduce a new system that uses a digital wallet linked to customers’ credit and debit cards. The plan is expected to start rolling out in the second half of 2023.
According to the wall street journalthese big banks are reportedly preparing to launch a digital wallet that allows online shopping links with debit and credit cards to compete with PayPal and Pay Apple.
Banks are working with money transfer service Zelle to establish a separate digital wallet system that uses the digital wallet.
The new service is expected to be operated by Early Warning Services (EWS), a joint venture owned by the banks and currently in charge of operating the Zelle service. According to EWS, the new unnamed digital wallet will operate separately from Zelle.
Anonymous sources said the new digital wallet is expected to compete with Apple Pay and PayPal. Banks intend to develop the wallet to prevent banking customer relationships with big tech like Apple, PayPal, among others.
EWS intends to initially launch the digital wallet service supporting Mastercard and Visa cards for retail customer users and then plans to expand it to enable direct payments from banks to merchants.
The launch of the service could be seen as a commitment to slow PayPal and Apple’s push into consumer banking, as these tech giants already offer credit cards and other products to their loyal customer base.
Big banks to embrace digital wallets and hold crypto?
While the banking giants are preparing to unveil a new payment wallet, there is no mention that the system will allow crypto payments through the wallet.
According to a McKinsey survey in 2021, over 80% of US citizens used digital payment apps, and one in five held some form of crypto. Digital wallets are becoming an increasingly widely adopted technology, and they hold more and more cryptocurrencies for their customers.
This implies that the aforementioned big banks could consider using the future digital wallet system to store crypto for users.
PayPalVenmo and Apple Pay are becoming widely popular digital wallets for storing multiple currencies (e.g. euros, US dollars, Mexican pesos) and cryptocurrencies, such as Bitcoin, Ethereum and others.
A growing number of major banks are embracing more direct contact with crypto. JP Morgan, CitiGroup, Goldman Sachs, Wells Fargo are some of the big banks now accepting creative digital assets of their users. To maintain profitability and compete, these banks may introduce cryptocurrency transactions with their upcoming digital wallet systems.
Crypto Market Cap Surpasses $1 Trillion
According to TradingView, major cryptocurrencies are trading in the green as the global crypto market capitalization increased by 0.65% to $1.08 trillion, with a volume of $51.84 billion during the course. of the last 24 hours. The crypto market is on a bull run with Bitcoin trading 1.44% down at US$22,702 over the 24 hours, taking last week’s gains to 8.8%.
Demand for Bitcoin is driven primarily by institutional investors increasing their crypto holdings in anticipation of the upcoming Bull Run. But next month’s Federal Reserve (Fed) meeting could be another turning point for the market.
Featured image from Unsplash, chart from TradingView.