Wells Fargo & Co. is the latest major financial institution to enter the mobile wallet space. Wells Fargo Wallet will soon join an increasingly crowded mobile wallet marketplace. But unlike nonbank competitors, banks have a distinct advantage: polls suggest mobile consumers trust banks most to manage accounts securely.
Recent data from the Federal Reserve indicated 28 percent of smartphone owners have made mobile payments within the past 12 months, and 53 percent of smartphone owners with bank accounts have used mobile banking. These trends are reflected in the growth of Wells Fargo's mobile banking channel, which according to the bank, is its fastest growing channel with more than 17 million mobile banking customers.
Wells Fargo built its mobile wallet in-house and credits global teams for testing the wallet and providing feedback in advance of the launch planned for the summer of 2016. Wallet users will apparently be able to add eligible Wells Fargo debit and credit cards to make payments at near field communication (NFC)-enabled terminals, as well as view account balances within the app before and after making purchases.
According to Jim Smith, Head of Virtual Channels for Wells Fargo, the new wallet will enable Android users to make secure NFC payments directly from the Wells Fargo mobile app. "We know mobile is key to the future of payments, and we expect Wells Fargo Wallet to provide us a richer understanding of the quickly evolving landscape," he said. In addition to transacting at NFC terminals, bank customers can use the wallet to conduct ATM transactions without having to present physical debit or ATM cards, bank sources stated, noting that more than 40 percent of Wells Fargo ATMs will be NFC-enabled by the end of 2016.
"We're looking to reimagine customer interactions with money in and across channels, and designing our own Wells Fargo Wallet allows us to further engage our customers, and innovate for the future," said Steve Ellis, Head of Wells Fargo's Innovation Group. "Continuous innovation enables Wells Fargo to save customers time and money, reduce fraud, and drive loyalty. With mobile ubiquitous in today's world, innovation around mobile will continue to be a key area of focus."
In late 2015, JPMorgan Chase & Co. said it planned roll out Chase Pay this summer, as well. Chase Pay, which relies on quick response codes to conduct transactions, will make it possible for merchants to accept payments in-store, online and in app, as well as link loyalty programs. To deliver Chase Pay, JPMorgan aligned with the Merchant Customer Exchange along with 18 technology partners, including Authorize.Net, BridgePay Network Solutions LLC, CardinalCommerce, CyberSource, FIS, LevelUp and USAePay, among others.
"These industry leaders will help merchants integrate Chase Pay into their overall payment acceptance strategy," said Michael K. Passilla, Chief Executive Officer of Commerce Solutions, the global payment processor and merchant acquirer of JPMorgan Chase whose customers have an estimated 94 million credit, debit and prepaid card accounts.
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