Chase, BoA and Wells Fargo team for digital payments venture
Banking giants Bank of America, Chase and Wells Fargo will team for clearXchange, a joint venture enabling customers to move money from one checking account to another via text message or email. The clearXchange solution enables customers of the three banks to move funds directly from their existing checking accounts using a mobile number or email address instead of account and routing numbers. "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," said Wells Fargo Executive Vice President and Head of Payments Strategy Mike Kennedy in a statement.
With clearXchange, Bank of America, Chase and Wells Fargo are introducing consumer-to-consumer services that not only eschew conventional cash and credit but also slash the complexity and costliness common across existing money transfer services. While anyone with a checking account drawn on a U.S. bank can transfer funds to another institution via the Federal Reserve wire system, bank consultant Mike Moebs tells The Los Angeles Times the service is extremely cumbersome, requiring users to input account numbers and routing codes. In addition, transaction fees can run anywhere from $12 to over $50.
The clearXchange service will roll out nationally--Bank of America and Wells Fargo already are now trialing the solution in Arizona, with Chase set to join the test soon. For now, the service is free, although a Bank of America spokesperson said the banks will eventually institute separate fee structures. In addition, the banks plan to expand the clearXchange network to other financial institutions and endpoints.
Bank of America, Wells Fargo and Chase are the nation's largest banks, representing one of every three consumer bank accounts. The banks will jointly own and operate clearXchange, with BoA's John Feldman serving as general manager of the new venture. Financial terms were not disclosed.
In related mobile commerce news, Google (NASDAQ:GOOG) is expected to unveil its own Near Field Communications-enabled contactless payment solution during a press event slated to begin today at 12:00 pm ET.
Check back with FierceMobileContent for complete coverage of the announcement.
- read this release