Several banks, including Bank of America and JPMorgan Chase, are collaborating to bring forth a payment wallet that gives other players in the market a run for their money. In a bid to compete with Apple Pay and PayPal, the works for a digital wallet that links with debit and credit cards are in motion.

According to sources, said digital wallet is to be operated by Early Warning Services, a joint venture from several banks, that also runs Zelle. EWS is owned by a collection of banks, including Capital One Financial and PNC Financial Services Group. A spokeswoman for EWS confirmed that the company is working on a new wallet for “consumers, merchants, and financial institutions.” Early Warning Services has confirmed that the wallet product will be launched this year itself.

The major banks involved include Wells Fargo, JPMorgan Chase, and Bank of America. The Wall Street Journal reports that Visa and MasterCard are already on board with the new wallet and the wallet will be initially launched with them. The wallet will debut in the second half of 2023 for Visa and Mastercard holders, according to the same source.

Experts speculate that this move by the major banks in the country is an effort to hold back Apple from dominating consumer banking. The tech giant’s already popular branded credit card is proof enough that the company’s loyal fanbase will be open to more products from them. In addition, PayPal shares are ticking up by 0.5%, after having fallen by 2%.

Slowly but steadily, digital payments are becoming the norm, especially among younger customers. It might have taken time to scale, but it is here and happening now. Banks need to appeal to a younger generation that prefers the security of a digital payment platform to many of the traditional modes of transaction.

Harshita Rawat, an analyst at Berstein, suggested that the major banks have always seen digital payments as a competitive market and have likely always envied firms like PayPal. However, creating a payment wallet from scratch and making it available to the public would take time, and it will be a while before the newest player in the market becomes a serious risk to the existing players.

“It simply takes a very long time, a killer customer experience (which needs to be better than incumbents, not just similar), and a compelling merchant value proposition to build the two-sided network effects in payments to achieve scale,” Rawat said in the note.

This report follows a season of mixed earnings for the big banks, and with a mild recession on the horizon for the U.S., even CEOs of the big banks are charting moves to stay safe during the recession. With bank stocks struggling even after rising interest rates, combined with the looming threat of recession and a slower investment banking environment, ways to gain net interest income become the point of focus.