American Banks to compete with Big Tech by launching a mobile wallet

Tuesday 19 September 2023 14:49 CET | News

A group of banks such as JP Morgan and Bank of America have revealed their plans to launch a mobile wallet named Paze in a bid to compete with Big Tech companies.

The operation of this app will be overseen by Early Warning Services, a consortium of banks that already manage the payments app Zelle. 

According to the Financial Times, Paze represents the latest indication that large banks view partnerships, whether collaborative efforts or joint ventures with technology firms, as their best strategy to counter the competitive advances made by companies such as Apple, Google, and, more recently, Elon Musk's X (previously known as Twitter), all of which aim to provide banking services to their extensive user bases. 

However, as banks increasingly seek to form alliances with fintech companies, regulators are scrutinising these partnerships more closely. In essence, concerns exist that such collaborations might expose banks and the broader US banking system to potential risks associated with illicit activities. 

This shift toward partnerships represents a notable departure from just a few years ago when major banks believed they could directly compete with Big Tech and fintech startups individually. 

For instance, in 2017, JPMorgan acquired fintech WePay for USD 400 million with the intention of using it as a foundation for its mobile wallet, Chase Pay. This wallet was intended to be a competitor to ApplePay and Stripe. However, less than four years later, due to a lack of customer adoption, the bank discontinued Chase Pay. 

More recently, JPMorgan has struck deals with Amazon and Apple to facilitate the expansion of banking services offered by these tech giants to their customers. Citigroup has also signed an agreement to provide financing for Amazon's instalment payment service. 

In the UK, Lloyds Banking Group has announced its intentions to form partnerships with fintech firms. Additionally, Orange's banking division in France has entered into agreements with fintech companies Younited and Mambu to power a digital lending platform and online banking services. 

Traditionally, banks have dominated the payments sector, particularly concerning consumer transactions. However, Apple has emerged as a formidable player with its tap-to-pay application, Apple Pay.


A group of banks such as JP Morgan and Bank of America have revealed their plans to launch a mobile wallet named Paze that would compete with Big Tech companies.


More information about Paze

Banks aim to replicate the success of Zelle, as the Financial Times reports that payments made through this platform surged by nearly 30% in 2022, reaching USD 629 billion and surpassing the USD 244 million processed by Venmo, owned by PayPal since 2013. 

Criticism has been directed at banks for not doing enough to reimburse Zelle customers who fall victim to fraud, which is a growing issue on the platform. In this regard, banks assert that they are not responsible for losses incurred through the payment tool, which is technically owned by an independent entity. 

To make Paze a compelling offering, consultants suggest that banks will need to allow it to connect directly to customers' bank accounts, potentially giving Paze an edge over competitors.

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Keywords: mobile payments, digital wallet, partnership, banks
Categories: Banking & Fintech
Companies: Bank of America, JP Morgan, Wells Fargo
Countries: United States
This article is part of category

Banking & Fintech

Bank of America


JP Morgan


Wells Fargo

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