Wells Fargo Wallet Goes Live on Android (Sorry, iPhone Users!)

© Can Stock Photo Inc. / jedsadabodinAnother bank is live with a digital wallet.

Wells Fargo & Co. joins JPMorgan Chase and Capital One in launching a bank-branded mobile payment platform, or digital wallet. These instruments for making transactions via mobile phone are meant to compete with PayPal, which has been abuzz lately with rumors of a possible looming deal with one of the payment networks. Other threats include Apple Pay, Android Pay, and Samsung Pay.

Wells Fargo announced in the spring that its wallet would launch midsummer, and the bank held to that schedule. The Android version launched yesterday. Because the wallet uses Host Card Emulation (HCE) to power its transactions, and HCE is not available on iOS, there are currently no plans for an iOS version.

Just 6 million of Wells Fargo’s 18 million mobile users — 38% to be more precise — are on Android devices, a bank spokeswoman told Bank Innovation. That leaves nearly two-thirds of Wells customers out in the cold relating to this wallet.

The wallet is incorporated in the Wells Fargo app. Wells Fargo-branded cards are added automatically — other cards do not work in the app. To make a payment, users simply tap an icon in the app to activate the payment function and then hold the phone near an NFC-enabled card reader.

Bank of America and U.S. Bank do not offer their own wallets.

Studies over the years have consistently shown that consumers want bank-branded wallets, but banks were beaten to the starting line by PayPal, Google, and Apple. Yet consumer usage of those methods at the point of sale remains low, so an opportunity still exists for banks to offer a superior rewards experience and leverage transaction data to make predictive, relevant offers. The recent Pokemon Go craze has banks talking about augmented reality as well, which could play into the loyalty and rewards experience.

Chase is taking a slightly different route, aligning itself with MCX and CurrentC (or some remnant version of those) to help merchants avoid card fees by routing transactions via ACH. Avoiding the card rails makes Visa CEO Charles Scharf mad — yet rumors persist Visa may be interested in acquiring PayPal.

The Wells wallet will also work for cardless withdrawals at ATMs. More than 40% of Wells Fargo ATMs will be NFC-enabled by the end of the year, the bank said. Bank of America offers the same via Android Pay. This is an interesting divergence in strategy. “We want to be in an open wallet ecosystem,” Hari Gopalkrishnan, client-facing platforms technology CIO at Bank of America Merrill Lynch, told Bank Innovation.

But Wells is going its own way, and not even taking iPhone users with it.

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Philip Ryan is Senior Editor of Bank Innovation and Senior Director of INV Fintech. He began covering financial services in 2012 and has more than 15 years' experience in online journalism, which makes him quite old. He can be reached at pryan@royalmedia.com.

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