ClearXchange Partners Lagging Bank of America by ‘Months’

  • JJ Hornblass
  • April 15, 2016
  • 1

canstockphoto34500147Bank of America Corp. needs to wait “a few months” for its clearXchange partners to catch up to it.

The megabank’s CEO, Brian Moynihan, said yesterday that clearXchange was “a few more months” from “heavy” marketing of the P2P payments platform. The holdup? The other partners.

“We’re up and operating that,” Moynihan said. “We still have a few more months before the rest of the colleagues in the consortium get up and then we’ll start to push that out in the market heavily.”

The other partners are: Capital One Financial Corp., FirstBank, U.S. Bank, JPMorgan Chase, and Wells Fargo & Co.

Still, Moynihan was positive about clearXchange, which would compete with PayPal and other platforms. He called it “a very interoperable payment network” and “a tremendous improvement over what we have today.” He said BofA was already currently processing “a fair amount of volume” via clearXchange, although he did not specify the exact amount, although he did point out that “the mobile wallet payments are still less than 0.2% of the total payments made with plastic at Bank of America.

Bank of America’s “credit/debit purchase volume” last quarter totaled $120.3 billion.

Not that Bank of America is expecting anything but greater digital transactions overall. The digital part of credit card spending among BofA customers is now 20%, and growing 15% per year, Moynihan told investors yesterday. In March, Bank of America facilitated almost $60 billion of online payments and about $20 billion mobile payments.

And the bank is adding 100,000 new users to its digit wallet offering per week. 

“The [wallet] payment usage was up 3% week over week, so you see this phenomenal growth rate,” he said.

A final piece to BofA digital payments strategy is Visa Checkout, the POS payments service which BofA is preloading with its card users’ data. Moynihan said “as best we can tell,” 13% to 14% of all the spend in Visa Checkout today is coming from Bank of America cards. That volume is off at least 1 million BofA cards in Visa Checkout.

We’ll drive that forward,” Moynihan said, “and if you put that all together you’re seeing tremendous volume off of all these mechanisms.”

Bank of America had $2.19 trillion of assets at the end of last quarter.

 

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at hornblass@gmail.com or 212-564-8972.

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