Early Warning Services, the company owned by seven top banks that operate Zelle, announced plans to launch its own digital wallet called Paze.
Paze, which will function separately from Zelle, will offer consumers and merchants another online checkout option to remove the friction out of the guest checkout experience. The wallet will begin its pilot over the summer by enabling consumers to use cards from Early Warning’s owner banks, followed by a full launch in the fall when any financial institution will be able to add their cards to Paze.
Early Warning is throwing its hat into the extremely competitive digital wallet market and hoping its close ties to FIs will set it up to succeed. Paze will debut as an e-commerce-only wallet, meaning it won’t be fully taking on wallets like Apple Pay and Google Pay that have built up a strong in-store presence. But, Paze will still be battling those wallets online as well as the likes of PayPal and the many other buttons that have popped up.
Paze will be able to load cards from participating banks into its wallet before consumers sign up for the wallet—removing friction for consumers during this process. Early Warning is hoping that combining convenience with consumer trust in their FIs will lead them to choose Paze over guest checkout and other digital wallet options.
Powerful companies have teamed up before to take on the digital payment space and have come up short—and it remains to be seen if Paze will perform better than its predecessors. Previously, top retailers collaborated on Merchant Customer Exchange (MCX), and top card networks teamed up to launch Click to Pay, and while Click to Pay is still around, both were unable to compete with top digital wallets despite their powerful backers and the advantages they offered them. Paze could be a different story if it can replicate Zelle’s success, which was also based on consumers’ existing relationships with their FIs, but it will need to quickly scale up its merchant and consumer networks to succeed.
Paze will launch with millions of cards pre-loaded into the platform thanks to its ties to banks, but it will need to push consumers to start using them, which will require Paze to convince as many as merchants as possible to add another wallet to their websites. Paze has plans to try to woo merchants that include access to data and greater control of the checkout experience than other wallets offer, and those offerings will need to be appealing if it is to succeed.
Overview by Daniel Keyes, Senior Analyst, Merchant Services at Javelin Strategy & Research.
