Banks & Online Payments
May 25, 2011 by staff
Banks & Online Payments, Three of the largest banks are in a career in the growing battle over how consumers to transfer money and make payments, the launch of a service Wednesday that allows people to use their bank accounts to send money each with an address e-mail or mobile phone number. Banks are looking to hold on to their influence on consumers who are increasingly rejecting checks and cash, turning instead to new banking technologies to spend their money. The new service from Bank of America Corp., Wells Fargo & Co. and JP Morgan Chase & Co. aims to offer popular PayPal. At stake are billions of dollars in credit cards, overdraft fees and control of each year.
“Customers want to move from paper to electronic payment methods, so if we can meet the financial needs of our customers, which customers will be better for us,” said Mike Kennedy, developing strategies for payment in San Francisco, Wells Fargo and is president of the new company.
Google Inc. has its own designs in the payments business in the hope of facilitating payments and special offers local merchants can be sent directly to customers’ smartphones. Consumers are expected to spend more than 1.2 billion and this year in commercial agreements provided by Internet companies like Groupon Inc., according to BIA / Kelsey, a consulting firm.
On Thursday, Google, which declined to comment, will announce details about a service that allows consumers to make purchases in stores and redeem coupons waving smartphones powered by Google against a small player in the cash desks, said people familiar with the matter.
The moves mean that Americans will soon have an unprecedented number of payment options that could further reduce the use of traditional methods. Google services and banks are based on the mobile, which could soon become the digital wallet promised for more than a decade.
Banks are trying to interfere in the domain of eBay Inc. ‘s PayPal unit; the market leader based electronic payments. The income of the unit has tripled since 2005 and now a third of operating profits of Ebay.
The new banking service that other financial institutions may join later carries some financial risk for them. Despite being aimed at payments from person to person, the owners of small and medium enterprises, or may ask customers to pay for goods and services by sending money directly from their online accounts. That could leave the skirt merchants now pay the fees banks to process debit and credit cards.
Google has already encountered in their efforts for online merchants to use your Google Checkout payment system. His last plan, in which Google is not expected a cut in transaction fees, requires real-world traders upgrade or purchase and install new equipment from companies like ViVOtech Inc. that receipts and expenditures and 100 to 350 and allows you to use a technology called near field communication, “or NFC.
The companies involved in new initiatives including Macy’s Inc., American Eagle Outfitters Inc. and Subway fast food chain, said a person familiar with the matter. The companies did not respond to requests for comment.
The phones work with Google’s Android software also include NFC technology in hardware that allows a person to wave the phone in front of a special reader credit card to facilitate the transaction.
In the new joint banking company, called clearXchange, customers of the three banks can use their computers or smart phones to access their online checking accounts and current account to move money from another client at another bank.
Online banking customers will not have to set up an account outside their main financial institution, and that customers should now do with PayPal, which also allows payments from person to person via email.
U.S. households and conducted more than 865 billion of payments between people across 11 billion transactions last year, according to a survey by consultancy Aite Group LLC. That amounts to about transactions and 7500 and 96 per household.
For banks, facing a series of new financial regulation expected to slow revenue growth, a shift to other forms of electronic payment could help reduce costs, in part because cash and checks are expensive to process. Cash is a low-tech way to pay, but transportation and collection of paper money are costs for financial institutions.
The program is also a way to retain customers who might be tempted to start using one of a number of alternative payment programs that exist or are being developed.
The banks, which are testing the service for free, ultimately, decide whether to charge customers for it. Some banks already offer customers a service to send money to other institutions, but that process usually requires more detailed information, such as checking account and routing numbers.
The struggle for consumer attention and dominance is particularly important for banks that are struggling to attract customers with new services. Banks often have no money in checking accounts, but they use to reel in customers with the hope that eventually register for profitable banking products such as credit cards and mortgages.
For Google, the new system will help promote your new business to help local businesses make deals and special offers to potential customers; a market operated by Groupon and other Internet companies. Google could have cut deals redeemed by consumers on devices with Android. Google, therefore, valuable data on consumer behavior, spending and be able to help marketers to better target advertising and try the offerings to customers through their mobile devices.
Rival of Apple Inc., which currently does not include similar technology mobile payments in the iPhone, has not indicated whether it plans to introduce and previously refused to comment on the matter.
Users can also manage the credit card bills and track spending, loyalty points and other things through smartphone applications.
But the web search giant will have to convince retailers to install card readers integrated with the new technology.
In addition, Google will face competition from players like Plaza Inc., which allows businesses to accept credit card payments by simply connecting a small player to a smart phone or tablet computer, and an initiative called Isis led by providers Verizon Wireless Services Wireless, AT & T Inc. and the U.S. T-Mobile. Isis will allow customers to pay for goods with their smartphones, while Discover Financial Services Inc. and other companies to process payments.
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