Bank of America, JPMorgan Chase and Wells Fargo have banded together to challenge PayPal for online payment service superiority, reports the Associated Press. A new mobile payments service called clearXchange now makes it easier for consumers to make person-to-person payments via a mobile number or email address. The trio of U.S. banking giants anticipates that clearXchange will eventually replace traditional money transfers entirely.
Lower fees than prepaid debit and eBay’s PayPal service
Despite the fact that big banks originated the cavalcade of account fees that customers have begrudgingly paid for years, Bank of America, JPMorgan Chase and Wells Fargo are marketing the Charlotte, N.C., clearXchange as a much less fee-intensive service than old options like prepaid debit cards and eBay’s PayPal online payment service. Only customers of the three banks will be able to use the person-to-person clearXchange at first, but that will change if the mobile payment service spreads.
JPMorgan’s Director of Mobile, eCommerce and Payments Jack Stephenson told the Associated Press that clearXchange couldn’t be simpler.
“Customers will be able to send and receive money even more quickly and easily,” he said, “with full confidence their funds are in a bank account without worrying about cash, checks or higher-cost services.”
PayPal a big oak to fell
According to eBay, PayPal currently boasts about 100 million active users and processed $27.4 billion in payments in the first quarter of 2011, a 28 percent increase from a year ago. PayPal’s revenue hit $992.3 million, and eBay is confident PayPal’s revenue will soon eclipse that of its parent company on an annual basis.
‘An innovative game-changer’
Wells Fargo Executive Vice President Mike Kennedy told Business Wire that clearXchange’s simplicity will change the mobile payments game.
“This is an innovative game-changer in electronic payments,” he said. “We want our customers to be able to easily send money to anyone without having to establish a new account outside their primary bank. All our customers need to know is the email address or mobile number of a friend or family member and (clearXchange) takes care of the rest.”