Major banks are now competing for a place in the mobile payment world, bracing for change as electronic wallets begin to hit the market.
For now the service is in beta and free of charge, though the three banks may charge for ClearXchange in the future as normal bank-to-bank transfers currently require a fee.
"Customers want to move payments from paper to electronic methods," said Mike Kennedy, chairman of the venture and payment strategist for Wells Fargo. "So if we can meet our customers' financial needs, they will be better customers with us."
As Kennedy suggests, banks now recognize the need to jump on the fast-moving mobile payment bandwagon before it leaves them stranded. With plenty of rivals circling around, Bank of America and the rest want to stake down territory before getting edged out by companies like Square and now Google.
The Mountain View, Calif.-based search engine giant is expected tomorrow to announce a new near-field communications, or NFC, payment system that will let users simply tap or swipe their phones to make purchases. Google is reportedly partnering with CitiGroup and Mastercard as well as VeriFone Systems and ViVOtech to ensure its venture takes off. Google hopes to lure in customers by including coupons and local deals in its NFC-powered payment system as well.
Besides Google, Square already markets a credit card reader that plugs into iPhone handset jacks, letting small business owners take payments without having to pay traditionally high credit card fees. Charging just 2.75 percent per transaction, Square's recently updated service even lets people purchase items by voice.
Along with Square and Google, AT&T, Verizon and T-Mobile are also scrambling to set up a mobile payment network. Their Isis e-wallet system was originally meant to run on Discover's network but will now join forces with Visa and MasterCard, as the two major credit card companies don't want to be left out in the cold.
PayPal is also getting into the game, announcing earlier this month intentions to create a point-of-sale mobile-payments system by the end of this year. PayPal has not yet disclosed specific plans for what it calls "proximity payments," but its leadership has said the shift to the point-of-sale is in response to fast-changing market conditions.
Unlike with PayPal, bank customers won't have to set up a separate account for their fund transfers, increasing the convenience factor of the banks' offering.
If the banks can capitalize on ClearXchange, they may yet hang on to their relevance as well as boosting revenue, an especially vital achievement in the current economy.
No comments:
Post a Comment