Six banks announced the formation of a secure, real-time payments network Monday. The enhanced platform will be open to credit unions and banks of all sizes.
“We are combining our collective, bank-owned digital payments network (clearXchange) with our fraud, risk and authentication assets (Early Warning), to further ensure that our customers can send money, confidently, securely and in real-time via their financial institutions,” the CEOs of Bank of America, BB&T, Capital One, JPMorgan Chase, U.S. Bank and Wells Fargo said in a joint statement.
Early Warning will acquire clearXchange, the largest bank-owned digital payments network in the United States. As part of the transaction, U.S. Bank and PNC will join Bank of America, BB&T, Capital One, JPMorgan Chase and Wells Fargo as owners of Early Warning, pending completion of all applicable regulatory reviews.
“Our customers want the ability to make payments to anyone, in real-time, making funds instantly available in the recipient's bank account,” the CEOs of the six banks stated.
“The bank CEOs are providing leadership at a time when the industry is looking for guidance and customers' expectations have rapidly evolved,” Paul Finch, president/CEO of the Scottsdale, Ariz.-based Early Warning said. “With this acquisition, Early Warning is bringing together immediate funds availability, integrated authentication and fraud management capabilities into a single platform. The resulting security, reliability and consistency among financial institution payment services will provide a required catalyst to advance real-time payments.”
The platform will help modernize and secure the U.S. payment system as envisioned by the Federal Reserve Bank's Payment System Improvement Initiative, the banks said. The platform's capabilities will also fulfill the CFPB's vision of consumer protection within new, faster payment systems.
According to the Federal Reserve's white paper, “Strategies for Improving the U.S. Payment System,” which was released earlier this year, the U.S. payment system is at a critical point in time in its evolution as technology rapidly alters numerous elements that sustain the payment process. The paper disclosed the five desired outcomes of the U.S. Payment system are speed, security, efficiency, international access and collaboration, and sought a cooperative endeavor by all stakeholders to attain these results.
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Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
