The number of consumers attempting to avoid credit card debt by making purchases through online-only payment services has risen sharply in the last few years, and now the nation’s top banks want a piece of the action.
Bank of America, JPMorgan Chase and Wells Fargo recently announced that they would launch an online payment service designed to compete with the massively popular PayPal, according to a report from the Wall Street Journal. The online payment market could be worth billions annually if the new venture is successful.
“Customers want to move payments from paper to electronic methods, so if we can meet our customers’ financial needs, they will be better customers with us,” Mike Kennedy, chairman of the new business, told the newspaper.
PayPal has grown by leaps since 2005, tripling revenues and accounting for one third of owner eBay’s operating profit, the report said.
In addition, the regulations related to interchange fees are far less clear for online transactions than those involving real credit or debit card information, meaning the banks may be able to increase revenues through these avenues as well.