Consumer interest in digital-first payment options have surged in recent years, and major tech companies such as Apple and PayPal have staked their claim in the online consumer payment world. With 81% of young Americans using peer-to-peer (P2P) payment platforms and an increasing appetite for retailers offering buy now, pay later (BNPL) options, some of the major traditional banks behind Zelle have announced they will be launching a new digital wallet to challenge Apple’s dominant position.
As might be expected for any company facing off against a consumer tech goliath like Apple, these new partners have considerable odds to overcome if they’re going to maintain a hold on digital payment services. Even with their resources now pooled to hang onto the P2P and BNPL sectors, Bankrate Senior Industry Analyst Ted Rossman characterized the big banks’ plans as “an uphill battle.”
“The big challenge for banks will be providing something unique enough to grab attention and convince people to use their solution rather than well-established services such as Apple Pay and PayPal,” said Rossman in an interview. On the other hand, established financial institutions have their share of advantages, including superior fraud protection and “an easier online checkout experience.”