Biggest US banks gearing up for Paze digital wallet marketing campaign

Seven large banks behind Paze, a new digital wallet, are preparing a marketing campaign to drive nationwide awareness of the app that aims to compete with PayPal and Apple Pay.

Paze is developed and operated by bank-owned financial technology company Early Warning Services LLC, which also operates Zelle. JPMorgan Chase & Co., one Early Warning Services owner, has sent out its first emails to introduce Paze to its credit and debit card holders, touting Paze as a "secure and convenient new way to check out online."

Other bank owners — Bank of America Corp., Capital One Financial Corp., PNC Financial Services Group Inc., Truist Financial Corp., U.S. Bancorp and Wells Fargo & Co. — will join the campaign later in 2024 to market Paze through their consumer channels, said James Anderson, managing director of Paze at Early Warning Services. Most of the banks have also set up introductory webpages about how to use the product.

The launch of Paze, which is used to make payments for online orders, is an example of the way banks are joining the digital wallet market at a time when competition is escalating from nonbanks. In a notable recent development, technology giant Apple Inc. announced a partnership with Affirm Holdings Inc. in June to introduce a buy-now, pay-later option for customers using Apple Pay at checkout.

Early Warning Services is loading credit and debit cards issued by participating financial institutions across 50 states into Paze throughout the summer, Anderson said. The process will add cardholders' banking information into the Paze wallet, including encrypted data about users' card numbers, email addresses, mobile numbers and billing addresses.

As a result, users would not have to sign up for Paze separately and would be presented with an option to use Paze at checkout when they enter the email address they already use at their banks' digital applications. Paze will authenticate the consumer by sending a one-time password via a text message using the mobile number on file.

The financial institutions will inform consumers after their cards are loaded onto Paze, and consumers can choose to opt out if they do not wish to use or share data with the app, Anderson said.

While Paze holds bank card information, it does not share users' actual card numbers with merchants, Anderson said. The platform tokenizes the 16-digit card number with a unique digital identifier that has no further use after the original transaction, he added.

Such easy access, helped through participating banks and credit unions, differentiates Paze from fintech companies' digital wallets, such as PayPal Holdings Inc.'s payment apps PayPal and Venmo, Shopify Inc.'s Shop Pay, and Block Inc.'s Cash App, in which consumers are expected to provide personal and banking information before they can use the payment apps.

JPMorgan, Bank of America, Capital One, PNC and Wells Fargo did not respond to inquiries from S&P Global Market Intelligence for this article. U.S. Bancorp and Truist declined to comment.