clearXchange to Offer Debit Transfers, Upping Speed, User Base
Users of bank-owned P2P money network clearXchange soon will be able to send funds via debit cards, offering faster transfers and significantly expanding the network’s potential customer base. clearXchange operator Early Warning—the joint venture comprised of Bank of America, BB&T, Capital One, JPMorgan Chase, PNC, U.S. Bank and Wells Fargo—has inked deals with Mastercard and Visa to enable debit card transfers over the Mastercard Send and Visa Direct P2P platforms. Currently, only customers of clearXchange’s owner banks can send funds over the network and have to do so directly from a bank account via ACH transfer.
The new deals—which will take effect at an unspecified date—open clearXchange to anyone with a debit card supported by Mastercard Send or Visa Direct. Notably, Mastercard Send is not limited to Mastercard-branded debit cards and is compatible with 97 percent of all U.S. debit cards, according to Mastercard. (Visa Send is planning to add support for non-Visa debit cards.) The means the vast majority of U.S. debit card holders will be able to access clearXchange.
Adding debit card transfers also means faster transactions, with funds sent and received “typically within seconds,” according to Mastercard, whereas in ACH transfers, funds can take as many as three days to settle into the recipient’s account. Earlier this year, two members of clearXchange—Bank of America and U.S. Bank—began offering real-time transfers over the network, but the initiative was limited to customers of those two banks.
The deals with Mastercard and Visa could help clearXchange’s financial institution owners compete in an increasingly crowded P2P money transfer market, where they face challenges from the likes of non-bank competitors including PayPal and Venmo, Square and Facebook—all of which have made fast transfers and interoperability cornerstones of their value propositions. In November 2015, Early Warning partnered with Fiserv to enable real-time bill payments and deposit services for 75 percent of all deposit accounts in the U.S. And with the new deals with Mastercard and Visa, it seems the consortium is looking to bring speed and ubiquity to its P2P offerings as well.