Big US banks to fight for instant payments market
Banks including JP Morgan Chase, Bank of America, Wells Fargo and US Bancorp will use their jointly-owned network, clearXchange, to let their customers transfer money.
“What we are doing now is delivering payments in real time, which is what our customers have asked for,” says Mary Harman, managing director for payments at Bank of America, in an interview with Reuters.
The list of start-ups and firms offering payment apps is long and at times repetitive in their concepts, but banks are recognising that they can get a share of this lucrative market.
Reuters says the banking industry has a “crucial advantage because it controls how quickly money actually moves between bank accounts”.
According to Javelin Strategy & Research, “individuals transferred some $200 billion to one another using mobile phones and computers last year”.
Reuters says Bank of America plans to announce today (9 March) that its customers can transfer funds instantly through clearXchange with customers of US Bancorp.
JP Morgan Chase and Capital One Financial Corp representatives told Reuters they plan to offer the service later this year.
Payments in 2016: a pivotal year
In the February 2016 edition of Banking Technology, this very issue of payments and banks was analysed.
With challenges across the board, banks will have their work cut out to keep up with the changing world of payments in 2016.
It is shaping up to be a pivotal year for the payments industry as regulation, new technology, major infrastructure overhaul projects and security issues combine to reshape the landscape.
According to a joint report from analyst firm Celent and payments systems company ACI Worldwide the result is that the time has come to “reimagine the payments relationships between banks, retailers and fintech firms”.