Big banks learned nothing from CurrentC, as they plan new competition for Apple Pay

Seven big banks are creating a mobile wallet app, designed to compete with Apple Pay, according to a new report today.

Bank of America, JPMorgan Chase, and Wells Fargo are three of the banks named, with two motivations suggested for the initiative …

Big banks worried about Apple Pay

First, the banks want to reduce online credit card fraud by encouraging customers to use a safer system, which does not expose their credit card number.

Second, banks are said to be worried about “losing control of their customer relationships” as customers choose to use Apple Pay for online checkouts.

The WSJ reports.

Big banks are teaming up to launch a digital wallet that people can use to shop online.

Wells Fargo, Bank of America, JPMorgan Chase and four other banks are working on a new product that will allow shoppers to pay at merchants’ online checkout with a wallet that will be linked to their debit and credit cards.

The digital wallet will be managed by Early Warning Services LLC, the bank-owned company that operates money-transfer service Zelle. The wallet, which doesn’t have a name yet, will operate separately from Zelle, EWS said.

Apple is considered a particularly big threat as it introduces a savings account and a “buy now, pay later” option.

The app will support Visa and Mastercard at launch, with Discover and other card networks approached to determine their interest.

The UI sounds clunky compared to Apple Pay. When you make an online purchase with Apple Pay, you simply select that as your payment method, verify with Face ID or Touch ID, and you’re done. With the new app, apparently you’ll enter your email address and then be presented with your registered card, choosing the one you want.

The banks are still ironing out the details of the customer experience. It likely will involve consumers’ typing their email on a merchant’s checkout page. The merchant would ping EWS, which would use its back-end connections to banks to identify which of the consumer’s cards can be loaded onto the wallet. Consumers would then choose which card to use or could opt out. 

The new app is said to be scheduled for launch in the second half of the year.

9to5Mac’s Take

Large businesses seem to keep learning the hard way that iPhone and Mac users love Apple Pay and are very happy for an Apple app to be the way they use their cards. Frankly, this sounds like CurrentC all over again.

Launched in 2014, stores couldn’t persuade people to use it even when they sabotaged their payment terminals to block the use of Apple Pay. It was a resounding failure, never even making it out of beta. We’re not expecting the upcoming system to fare any better.