Is Uber Wallet a challenger bank—or something more ambitious?

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Uber launched a series of financial services to provide real-time wage payments and enhanced account features in a single app, seemingly putting Uber in the role of a digital bank.

But the Uber Wallet, announced Monday, isn't competing against traditional financial institutions. Its biggest rival may be the Apple Card.

The more pieces of the financial relationship Uber owns, the more it can do for drivers and passengers. Drivers with an Uber Debit account can get their earnings in real time, for example. The services leverage Uber’s existing relationships with Green Dot Corp. and Barclays to bring a growing range of financial services together in one place— with hints of more financial services products to come.

Uber has offered versions of these services before, and it is combining them at a time when the Apple Card has demonstrated the potential of delivering diverse financial services through a digital relationship.

The Apple Card, which launched this summer, differentiates itself by allowing consumers to apply for and manage the card without ever touching a bank's app — features Uber already offered in its own cobrand card, launched in late 2017.

For Uber and its rival Lyft, owning the card relationship is much more beneficial than letting users pay with a mobile wallet. Apple Pay tokenizes payments, and Apple Card uses virtual card numbers to protect accounts. While both of these help the consumer, they limit the data Uber and Lyft can use to improve risk management and refine the user experience.

“With these moves, Uber is essentially on its way to becoming a digital bank by delivering a range of services without the need for a banking license,” said Richard Crone, a principal with Crone Consulting LLC.

That said, Apple Card may be more of a frenemy than a sworn rival; Uber is one of the few companies to offer improved rewards for Apple Card spending.

The key to Uber Wallet is its longstanding relationship with Green Dot, which since 2016 has provided Uber with a digital bank account. Green Dot in 2012 launched the GoBank digital bank using its own bank license and mobile banking technology from Loopt.

The full-blown Uber Wallet for the first time integrates the Uber debit account into the Uber Driver app, giving drivers immediate access to their earnings with no additional fee, an upgrade from other faster payments approaches. Uber for the past few years has offered drivers the opportunity to collect wages as often as every two hours through direct debit integrations with Visa Direct and Mastercard Send.

Within Uber Wallet, real-time wage payments are available through Green Dot. Uber Wallet’s new real-time payments feature is different than its existing Instant Pay service, and doesn't use debit card push technology, an Uber spokesperson said.

Uber also is sweetening the incentives for drivers to use its debit account for everyday transactions by adding 3% cash back on gas purchases, going up to 6% for longer-term Uber Pro drivers, Uber said in a Monday announcement.

Uber pointedly is also wrapping access to its cobranded Uber Visa credit card, launched two years ago with Barclaycard, into the Uber Wallet, with richer rewards. Users may now earn 5% back in Uber Cash from spending on Uber rides, Uber Eats, JUMP bikes and scooters. Users may even earn rewards for catching an Uber Copter from New York City to JFK.

Under Peter Hazlehurst, a former Google and Yodlee exec who Uber has tapped to head its new Uber Money division, Uber Wallet plans to expand its offerings. Hazlehurst, who joined Uber about 18 months ago as head of payments, has diverse experience with startups and served for more than a year as senior product developer at Google Wallet in the months before Apple Pay was introduced.

“With Uber Wallet, earners and spenders will now be able to easily track their earning and spending history, manage and move their money, and discover new Uber financial products all in one place,” Hazlehurst said in a blog post Monday.

An Uber spokesperson declined to specify what types of products Uber plans to offer through the Wallet.

While Uber hasn't finished building out its Wallet, the latest additions show the company's incremental development of bank-like services, delivered to a global audience without brick and mortar, Crone said.

Uber's vision is in line with what emerging U.S. digital banks like Chime and Varo — and Europe's crop of challenger banks — are working to achieve by empowering consumers with banking services in the path of their everyday activities, according to Crone.

"Hazlehurst is one of the pioneers of so-called challenger banking, and he understands the moving parts better than almost anyone else, to pull together the technology and user experience people are looking for in finance and commerce services," Crone said.

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Mobile wallets Mobile payments Credit cards Debit cards Loyalty and rewards Faster payments Uber Green Dot Barclays