Bank of America Upgrades ClearXchange’s Payment Role

June 11, 2024 by

Image credit: Mike Mozart

ClearXchange, the distribution network that allows users to make payments to email addresses, is the brainchild of Bank of America, Wells Fargo, and JP Morgan Chase with additional support from Capital One and FirstBank.

The financial conglomerates make up more than 50 percent of the online banking market and lead the way in digital transactions.

The peer-to-peer network established by Bank of America is now being expanded to permit other transactions like insurance payouts to be made via clearXchange with a test roll-out to determine its effectiveness. Corporate distributions will be made easier through the streamlined network.

Other Bank of America markets in Canada and the U.K. will similarly expand its base beyond P2P payments.

According to a recent Fed survey, 85 percent of consumers and 81 percent of merchants desired a digital payment system that operated without using account numbers. In the US alone, Bank of America clears 25 percent of all transactions, making them well positioned among their competitors.

The P2P market is relatively small market, sitting at about $1.2 billion, but may open the door to other payment services. The nature of P2P means that it’s well suited to corporate transactions because payments are being sent without requiring the recipient’s details like account information and other personal data.

Banks using the clearXchange network are able to compete with alternative payment systems like PayPal and Dwolla.

The market for emerging payments seems to appeal mostly to non-banking companies, but more and more banks are jumping on the bandwagon in order to stay competitive while offering consumers more services.

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