These Major Banks Are Launching a Digital Wallet to Rival Apple Pay. Should You Use It?

It's always exciting when there's a new player in town.

There's no denying that Apple's customer base is fiercely loyal to the brand. It had no trouble signing up customers when it first offered a branded credit card. It's possible that banks are nervous about what will happen as the tech giant rolls out other financial services. In fact, banks are likely nervous about what will happen when a host of fintechs introduce new financial products and services.

It may be for that reason that several banks are working to release a version of digital wallet that will compete with the likes of Apple Pay, Samsung Wallet, and PayPal. Reportedly, the wallet will be released as early as the end of 2023 and, like other digital wallets, will link with both debit and credit cards.

Who's involved?

While the digital wallet will be operated by Early Warning Services, it's a joint venture between several of the same banks that own Zelle. This includes Wells Fargo, JPMorgan Chase, and Bank of America.

What is a digital wallet?

Also known as an electronic wallet, mobile wallet, or e-wallet, a digital wallet is a software application that allows users to securely store the digital versions of their payment methods. For example, a user can store credit cards, debit cards, cryptocurrency, gift cards, event tickets, and boarding passes directly on their smartphones or smartwatches. Users can even use their wallets to store coupons and passwords.

Digital wallets can be used online and in stores that accept mobile payments. To determine whether a business accepts mobile payment, customers look for a symbol resembling a sideways wifi icon.

What's it going to take for the new digital wallet to succeed?

Chances are, most people who are interested in using a digital wallet are already doing so and have grown comfortable with the way their current wallet works.

In an interview with CNBC, an analyst from the private wealth management firm Bernstein discussed what it will take for the new digital wallet to create a faithful following of its own. According to Harshita Rawat, it's going to take a very long time, a killer customer experience that's better than its competitors, and compelling merchant value to compete with the big, established names in digital wallets.

Should you take the leap?

Whether you adopt the new digital wallet may come down to three things:

1. Are you currently using a digital wallet? If so, how do you feel about the experience? Have you encountered any issues that have made the experience more difficult than it needs to be?
2. Are you comfortable with the level of security that surrounds your current digital wallet?
3. Is there something else you're looking for? For example, if a company released a digital wallet that provided you with access to your credit card balances, would that be enough to encourage you to use a new wallet?

If you're not currently a digital wallet user, the field is wide open to you. Before taking the leap, though, you may want to allow the new service to iron out any potential kinks in their offering.

When released, the new wallet will have a couple of big names onboard, as Visa and Mastercard have already committed.