Digital wallet systems have been around for quite some time. Those coming late to the party will have to put on an impressive show of value to get people to pivot. That’s just what a coalition of companies hopes will happen as seven major banks, including Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM), and Wells Fargo (NYSE:WFC) roll out their own digital wallet. All three are up so far in Monday afternoon trading.
The coalition of banks involved here, reports suggest, have their eye on one major prize: becoming the new Apple Pay. The new wallet would connect to both credit and debit cards, and both Visa (NYSE:V) and Mastercard (NYSE:MA) are on board to offer support. The wallet is slated to launch later this year, and updates about the product itself will likely be out sometime Tuesday. One immediate feature the wallet offered was a smoother user experience. It will keep track of necessary numbers—card numbers, expiration dates, and security PINs—which should cut down on fraud.
Some are skeptical of the banks’ new initiative. Harshita Rawat, an analyst with Bernstein, pointed out that banks need to roll out a “killer customer experience” sufficient enough to get users to pivot from their current wallet of choice. Apple Pay and PayPal (NASDAQ:PYPL) have a significant early-adopter advantage, and getting users to break away will require a lot of incentives.
Overall, analyst consensus calls all three bank stocks Moderate Buys. Each has similar upside potential as well. The lowest comes from JPMorgan Chase, with 14.34% upside thanks to its average price target of $157.46 per share. Meanwhile, the highest is at Bank of America. Its 17.68% upside potential comes from an average price target of $40.53 per share.
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