Major banks working to launch digital wallet to compete with PayPal, Apple Pay

Seven major banks, including Wells Fargo, Bank of America and JPMorgan Chase, are working to launch a product to allow customers to pay online with a digital wallet similar to PayPal and Apple Pay.

Early Warning Services LLC, a bank-owned company that runs the financial transfer service Zelle, will manage the digital wallet, The Wall Street Journal reported Monday. The company said the wallet, which is still unnamed, will be separate from Zelle. 

The banks are seeking to limit fraud and compete with third-party wallets such as PayPal and Apple Pay, people familiar with the matter said. The banks are concerned that they will lose control of their customer relationships, especially as Apple is working on a savings account with Goldman Sachs.

The banks considered a plan to use Zelle for online shopping, but the proposal was axed due to concerns about fraud.

About 150 million credit and debit cards will be able to use the wallet upon rollout. U.S. consumers will be eligible if they have provided a phone number and email address, have used their card online recently and are up-to-date on payments.