Easier Peer-to-Peer Banking

ClearXchange is an U.S. banking-platform launched in 2011. It enabled users to check accounts and to send each other money verified with their email address or cellphone number. Customers could only send funds to anyone with a U.S. bank account.

The cooperating banks announced earlier this week that the platform is enriched with two new large U.S. banks. ClearXchange’s structure is planned to being overhauled in the near future due to the two new abanks that have joint in. The ownership of the network will go to Early Warning a bank-owned entity specialized in fraud prevention and risk management. Currently the platform is owned by five large banks. The launch of the renewed platform for Smartphone-based peer-to-peer payment between banks’ apps is expected before summer this year.

Together they have developed plans to expand the payment service in terms of the ability to transfer funds immediately for all transactions. Currently, only customers from the same bank have instant access to their funds; transactions between customers from different banks take a day to clear. In most western economies this is the case. People who recognize this might all agree that this is unbelievable when the technological opportunities are considered.

The expansion is a reaction from the traditional banks who try to keep closely attached to their customers especially in this time of new startups with new business models entering the market of banking by offering new solutions in financial services. The attribution of the customers switching towards other apps or companies which provide the services they expect from managing their own financials has caused great concerns for the traditional banks. ClearXchange’s chief executive; Michael Kennedy stated it briefly but clearly: “We want to keep the banks at the center of the customers’ financial life,”. He also said that the banking, but especially the app, service is growing and that the sizes of the separate transactions are getting larger over time as customers become more and more comfortable with zapping money to each other.

The plans are that the platform will develop towards a globally accessible platform which enables customers to make real time payments.

It seems that the power of the traditional banks has moved away from them and that nowadays the startups and in line with them the customers are in charge. An interesting change in a market which has been in the center of every western economy. In the recent crises banks were, in most cases, pointed at as being the cause of the troubles victimizing the (private) customers. With this new trend it seems that things have changed and the banks must react without having any other option. Something they long assumed was not possible is happing. New, small firms are taking over their market offering services which fit the wishes of their current customers. Individuals with no power, collectively have shown that even the banks cannot lean backwards these days. After all they even forced the banks to work together because these enormous firms are not capable of solving this problem themselves.

A very intriguing development after all. We will see how it works out and if this cooperative solution of the banks arrives on time.

To be continued…

sources

http://www.cnbc.com/2016/02/25/banks-team-up-for-mobile-cash-transfers.html

http://www.wsj.com/articles/payments-network-clearxchange-gets-reboot-1445880088