As Apple Inc
Fintech Partnerships Have Been In The Air For A While Now
Fintech has been taking a bite out of traditional banking. In April, Apple continued its iBanking revolution that began with Apple Pay by joining forces with The Goldman Sachs Group Inc
For example, JPMorgan has struck deals with both Apple and Amazon.com Inc
Big Banks' Mobile Wallet
Named Paze, the banks' soon to be launched digital wallet will be operated by Early Warning Services. This bank consortium group already runs the payments app Zelle which became the largest-peer-to-peer payment app pretty quickly since its launch in 2017 so no wonder that big banks are hoping that the same formula will help replicate this success.
Last year, payments over Zelle increased almost 30% to $629 billion while PayPal Holdings Inc
Fintech Partnerships Are Here To Stay
Paze shows that rivaling banks are willing to work together and to use the expertise of tech firm to stop Apple, Google and most recently, X, whose goal is to offer banking services. Although Financial Times quoted a market research study that merely 6% of global purchases was made by Apple Pay, the number of users skyrocketed in five years, going from 60 million to now exceeding 500 million and that is making banks nervous.
Yet, fintech partnership are not favored by regulators whose concern is that such unions expose the U.S. banking system to non-trustworthy players.
Putting The Genie Back In The Bottle Is An Unlikely Scenario
Big Tech is certainly giving Big Banks a run for their money as Apple, Amazon and Google are poised to challenge the power that banks have enjoyed for a very long time and the mobile wallet is now the biggest battleground in this tussle. Many believe that banks are not able to put the Apple, Amazon and Google genie back in the bottle as the history of the industry is filled with advancements that ultimately became industry standards.
DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.