Major US banks, including Bank of America, JP Morgan Chase, and Wells Fargo plan to introduce new systems that use digital wallets linked to customers’ credit and debit cards. The plan is scheduled to begin in the second half of 2023.
According to The Wall Street JournalThese major banks are reportedly preparing to launch digital wallets that enable online shopping links with debit and credit cards to compete with the likes of PayPal and Apple Pay.
The banks have partnered with money transfer service Zelle to create a separate digital wallet system that uses digital wallets.
The new service is planned to be operated by Early Warning Services (EWS), a joint venture owned by the banks and currently responsible for operating the Zelle service. As per EWS, the new unnamed digital wallet will work separately from Zelle.
An anonymous source claims that the new digital wallet is planned to compete with Apple Pay and PayPal. Banks are going to develop wallets to avoid banking customer relationships with big tech like Apple, PayPal, and others.
EWS plans to launch a digital wallet service that supports Mastercard and Visa cards for retail customer users and then plans to expand to allow direct payments from banks to merchants.
Launching the service could be seen as a commitment to slow PayPal and Apple’s push into consumer banking, as the tech giant already offers credit cards and other products to its loyal customer base.
Big Banks To Embrace Digital Wallets And Hold Crypto?
While the banking giant is preparing to launch a new payment wallet, there is no mention that the system will enable crypto payments through the wallet.
According to a McKinsey survey by 2021, more than 80% of US citizens will have used a digital payment application, and one in five will have held some form of crypto. Digital wallets are becoming a more widely adopted technology, and are increasingly holding cryptocurrencies for their customers.
This suggests that the major banks mentioned above may consider using the upcoming digital wallet system to store crypto for their users.
PayPal, Venmo, and Apple Pay are popular digital wallets for storing various currencies (e.g., euros, US dollars, Mexican pesos) and cryptocurrencies, such as Bitcoin, Ethereum, and others.
More and more major banks are embracing direct contact with crypto. JP Morgan, CitiGroup, Goldman Sachs, Wells Fargo are some of the big banks today accept creative digital assets from users. In order to maintain profits and gain competition, these banks may introduce cryptocurrency transactions with the upcoming digital wallet system.
Crypto Market Capitalization Moves Above $1 Trillion
According to TradingView, major cryptocurrencies traded in the green as the global crypto market cap increased by 0.65% to $1.08 trillion, with a volume of $51.84 billion over the past 24 hours. The crypto market experienced a bullish period with Bitcoin trading at 1.44% down at US$22,702 in 24 hours, bringing the gains of the last week to 8.8%.
Bitcoin demand is mainly driven by institutional investors increasing their crypto holdings in anticipation of the next Bull Run. But the Federal Reserve (Fed) meeting next month could be another turning point in the market.
Featured images from Unsplash, Charts from TradingView.