Early Warning Services replaced the leader of its Paze digital wallet operation last month, after a predecessor left quietly in July following slow progress on the effort.

Paze was formerly led by managing director James Anderson, who was appointed in August 2022, according to his LinkedIn profile. Anderson did not respond to a message sent to his LinkedIn page.

In a press release last month, EWS said it had tapped Serge Elkiner as a new general manager for Paze. Elkiner, who was the global head of money movement at Visa until September, was tasked with taking Paze into its “next phase of growth,” according to the Oct. 1 release. 

Early Warning Services — a Scottsdale, Arizona-based payment network that also operates the peer-to-peer payment platform Zelle — first sought to launch Paze last year, but didn’t. The plan had been that the digital wallet would go live with merchants and member banks in June 2023, before a wider rollout in the fall. But since then it has made progress only in fits and starts this year.

Anderson, a former Mastercard executive, left two months after explaining to Payments Dive in February how EWS was rolling Paze out initially in South Carolina and Arizona early this year. Then in May, Anderson told Payments Dive that Paze had launched in Texas and was in the process of starting up in a handful of New England states, with an aim to be nationwide for the start of the holiday shopping season late this year.

While an EWS spokesman now says Paze has nationwide coverage across all 50 states, as of July, the wallet is still only offered by the seven banks that own EWS, and some of them adopted the digital wallet system only recently. US Bank added the digital wallet in September and Wells Fargo did the same last month.

Also, Paze option was supposed to be automatically loaded onto 150 million Visa and Mastercard credit cards from day one, according to Anderson’s comments last year, but the company is still trying to reach that goal.

At a major industry conference last week, Catherine Murchie, head of operations for Paze, said EWS is still seeking to connect all those cards to the digital wallet, aiming to get it done by the end of the year. Murchie said 125 million cards were connected, during a panel discussion at the annual Money 20/20 conference in Las Vegas on Oct. 29. 

“We also have other banks who are going to be joining and provisioning cards going into 2025 and we're really excited about that,” Murchie said at that time.

An EWS spokesperson this week said that figure has risen to 140 million now. The spokesperson stressed that Paze’s latest expansion efforts are still in “the early days.” “There’s a lot of awareness and we’re starting to build momentum,” he said.

Murchie reports to Elkiner, who was also a co-founder of YellowPepper, a Miami-based mobile payments software company facilitating real-time payments that was acquired by Visa in 2020, according to his LinkedIn profile.

EWS plans to expand by persuading more consumers and merchants to sign up to use the digital wallet. The banks currently offering the service also include Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist.

Only a few major retailers use Paze, including 1-800 Flowers, the sports apparel company Fanatics, the grocery chain Shoprite and the makeup and skincare retailer Sephora, according to the services’ website. United Airlines also gives customers the option of using Paze.

The digital wallet had 80,000 participating merchants — mostly small businesses — as of May, Anderson said in an interview at the time.

The EWS spokesperson declined to say how many merchants are using Paze now, but Murchie told the Money 20/20 panel on Oct. 29 that “thousands” of merchants are participating. Even 900,000 would be a fraction of the roughly 29 million merchants in the United States. Participating merchants can offer the Paze option at checkout, next to alternative payment methods.

When users initially sign up for Paze, they provide their credit card number, which means they don’t need to repeatedly enter their card information when they shop with participating retailers.

EWS pitches Paze as a safer alternative to traditional credit cards because merchants will never see a shopper’s card number and each transaction is tokenized. In other words, every transaction has a unique number attached to it that is never duplicated, whereas a credit card uses the same card number for each transaction.

“What we're trying to achieve at the end of day is safety and security,” Murchie said.

Some industry professional agree, and consider digital wallets safer than credit cards, because they require an extra layer of authentication.

The EWS spokesperson declined to comment on why the company has taken longer to roll out Paze than initially expected last year.

EWS’s goal is “to create a ubiquitous product for a convenient online checkout experience,” he said.

Paze is stepping up marketing to reach new customers and merchants, said Abeer Bhatia, head of enterprise payments and personal lending at Wells Fargo, one of EWS’s bank owners.

“In 2025, you'll see us ramping up some of the customer outreach activities out there,” Bhatia said. “We're obviously working closely with our partners to make sure we can get more merchants signed up.”

By Patrick Cooley on Nov 7, 2024
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