US based bank Capital One is now offering Peer-to-Peer money transfers to its 65 million account holders.
Capital One will be utilizing San Francisco based P2P platform ClearXchange to complete the money transfers. ClearXchange is a bank-owned platform founded in 2011 by a joint venture between Bank of America, J.P. Morgan Chase and Wells Fargo. The founding banks along with Capital One all own equal shares of ClearXchange.
The idea behind offering electronic P2P transfers is due to the decrease in use of physical checks in favor of mobile and online transfers.
“Customers were saying, ‘I want an easy way to pay my friend back for dinner without going to a third-party site. Our service allows people to send money to anyone with an e-mail address or a cell phone number,” said Mike Kennedy, chief executive of ClearXchange.
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To use the service, any Capital One account holder can simply login to their account, be it online or via the mobile application, and simply enter the recipient’s phone number and email address. The bank will then ping the recipient’s bank and facilitate the transfer. No fee is taken from either party to complete the transfer.
“Most customers have a need to [make person-to-person transfers] and we, as an industry, should make it as easy as possible,” said Jack Forestell, executive vice president of digital at Capital One.
The number of Americans using mobile banking application has grown by 50% this past year. Currently 1 out of 3 Americans perform banking tasks via mobile devices.