Three US big banks to launch new money-transfer system

Bank of America, JPMorgan Chase and Wells Fargo today announced that they have formed a new venture to enable their customers to move money more conveniently and safely using a mobile number or email address.

The joint venture is called clearXchange. clearXchange is the first bank-owned solution of
its kind and the service is available to its partners today.

Customers of the three banks will be able to move funds directly from their existing checking accounts using an email address or mobile number – instead of providing checking account and routing numbers. The clearXchange service will roll out nationally and there are plans over time to expand it to include other financial institutions and endpoints to create a money movement capability across the industry.

"This is an innovative game-changer in electronic payments," said Mike Kennedy, EVP and Head of Payments Strategy at Wells Fargo. "We want our customers to be able to easily send money to anyone without having to establish a new account outside their primary bank. All our customers need to know is the email address or mobile number of a friend or family member and we will take care of the rest utilizing clearXchange."

"Our goal is to provide convenient and safe financial services options for our customers," said David Owen, eCommerce, Claims and Fraud Executive at Bank of America. "By creating a utility like clearXchange, we are able to meet the needs of our customers and differentiate our capabilities from other offerings in the marketplace."

"clearXchange will allow us to make our popular person to person payments service even better," said Jack Stephenson, director of Mobile, eCommerce and Payments at JPMorgan Chase. "Chase customers will be able to send and receive money even more quickly and easily – with full confidence their funds are in a bank account without worrying about cash, checks or higher-cost services."

clearXchange is a direct threat to PayPal, which dominates the market for online, electronic payments with nearly 100 million active users. eBay said last month that PayPal processed US$ 27.4 billion in payments during the first quarter, a 28% increase over the previous year. PayPal's revenue was $992.3 million, and eBay expects PayPal's revenue to surpass that of the auction site in the next few years.

The three banks will own and run clearXchange, with Bank of America's John Feldman serving as General Manager.

Source: Media Group
Date: 25.05.2011 [292]