Early Warning Unveils Paze, Its Multi-Bank Wallet Aimed at Easing E-Commerce

Early Warning Services LLC, a fintech owned by seven of the nation’s largest banks, will launch its digital wallet with a pilot this summer followed by general availability in the fall, the top official in charge of the project said Monday.

The new wallet, called Paze and aimed exclusively at e-commerce use, will start with backing by the owners of EWS but will be “available to all banks regardless of size,” James Anderson, managing director of wallet at EWS, told Digital Transactions News. “Every financial institution will have access to it. It’s not a big integration.” Multiple issuers could be represented in a single Paze wallet, Anderson said. 

With a wide scope of issuers, the company expects banks representing 150 million cards to be participating in Paze by the time of the commercial launch, he added. “All the eligible consumer’s cards they use with e-commerce will show up on the day they get the wallet,” Anderson says, adding Paze will deliver “better outcomes for merchants,” including lower cart abandonment.

Experts agree with Anderson on that score. “Since EWS is owned by the largest banks, their strength is the ability to basically pre-load the country’s leading payment cards into this wallet, which will give it customer side critical mass at launch, and that’s a big deal,” says Thad Peterson, strategic advisor at Aite-Novarica, a financial-services consultancy, in an email message.

Merchants, meanwhile, are reacting positively so far to the development, Anderson said, though pricing details beyond standard bank card transaction rates were not available. “We have to show up at scale, which we’re doing with 150 million cards to start,” he said, though he added the service will carry “no extra fees” to merchants, banks, or cardholders. “We’re humble enough to know we have to deliver value.”

Peterson, though, argues the merchant side of the proposition will be tough going for EWS. “Merchants already accept these cards, and there are a few alternatives that are already at scale, PayPal, Amazon Pay, Apple Pay, and Google [Wallet], among others,” he notes. “Unless there is an incentive for a merchant to accept the Paze wallet, it might be a challenge for EWS to convince merchants to take on another payment alternative.”

The introduction of Paze follows months of speculation about EWS’s wallet project, news of which first emerged in January. The banks that own the Scottsdale, Ariz.-based company—Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank and Wells Fargo—are also among the nation’s largest card issuers.

EWS is well known as the operator of the Zelle peer-to-peer payments network, which competes with the nonbank P2P services Venmo, owned by PayPal Holdings Inc., and Cash App, part of Block Inc.

Cardholders at participating banks will see their cards preloaded in a Paze wallet. “Once the consumer claims their wallet, they’ll see all their cards,” Anderson says, if the user had used the card for an e-commerce purchase within the last six months.

The new wallet, which will enter a market dominated for nearly a decade by apps such as Apple Pay and Google Wallet, will avoid head-on competition with those products by eschewing in-store commerce. “This is e-commerce only,” says Anderson, who points to accounts of problems consumers have completing credit card transactions online. “Consumers don’t love the payment part” of online purchases, he says. By contrast, he adds, “point of sale works pretty well. There’s lots of opportunity [online].” Paze, however, will go up against PayPal’s app, which has concentrated for years on e-commerce transactions.

And observers like Peterson warn that competition from long-established wallets can’t be discounted. Paze, he notes, is “online only, a significant limitation in a world of omnicommerce, especially with Apple Pay and Google [Wallet] able to transcend the digital/physical barrier.”

So far, Anderson says, Paze “is being very well-received by merchants.”