New Offering Allows Companies to Make Payments
to Their Customers Without Checks by Using Either a Mobile Phone
Number or Email Address as the Identifier
Bank of America Merrill Lynch today announced the launch of
Digital Disbursements, a new payment solution that enables
companies to make payments to their customers digitally,
eliminating the need to issue a check. The payments are directly
routed to the bank account of the individual payee’s choosing using
either a mobile phone number or email address as the identifier.
The solution leverages the technology behind person-to-person
payments, a capability currently available to individual customers
of Bank of America’s consumer business.
“Digital Disbursements emerges from the rapidly evolving world
of payments, in which both consumers and corporations are
increasingly opting for faster, easier ways to send and receive
money electronically,” said Ather Williams III, head of Global
Payments in Global Transaction Services (GTS). “Through this
method, customers don’t have to wait for the check to come in the
mail and there is no need for companies to maintain sensitive
personal bank account information.” The types of
business-to-consumer payments that could be supported by Digital
Disbursements include rebates, refunds and claims payments.
Digital Disbursements was created to serve middle-market, large
corporate and public sector clients. It uses the proven technology
already in existence for person-to-person (P2P) payments, a
capability currently offered by Bank of America’s consumer business
through the company’s alliance with clearXchange. Individual
consumers have adopted P2P payment practices in large numbers, and
feedback from focus groups concluded that people are eager to
receive payments from companies or government entities in the same
way.
Corporate clients will receive the following benefits from
Digital Disbursements:
- The ability to deliver funds to
customers faster and with less complexity than a physical
check.
- A reduction in end-to-end disbursement
costs by as much as 75 percent when compared to a physical check.
Merchants could potentially save more than US$1 billion annually by
eliminating disbursement checks1.
- Reduction in escheatment management, an
administrative burden that is both costly and time consuming.
- Elimination of the need to obtain and
store sensitive bank account information.
“Digital Disbursements is an example of true partnership and our
commitment to collaborate across our businesses to deliver the best
solutions for our clients based on their needs,” said Bill Pappas,
Global Wholesale Banking Technology and Operations CIO. “By
leveraging proven technology, we were able to develop an innovative
solution for our corporate clients which speeds the payment process
from several days to only a few minutes.”
“We are very proud to be one of the first banks to offer an
alias-based business-to-consumer payments solution. Our corporate
clients and their customers will benefit greatly from Digital
Disbursements, which is an important step in the evolution of the
payments industry in the United States,” said Dub Newman, head of
Global Transaction Services, North America.
Digital Disbursements solves challenges facing payers and
payees, while aligning with evolving trends in technology usage. A
recent study performed by the Federal Reserve found that 85 percent
of consumers and 81 percent of businesses prefer not to provide
bank account information to the payee when making a payment2.
Separately, the trend towards mobile banking continues to rise, and
it is anticipated that by 2018, 63 percent of the mobile consumer
population in the United States will use mobile banking3.
Digital Disbursements will be initially introduced to clients
making payments in the United States. However, given the product’s
global application, and that clients and their customers want the
same convenience wherever in the world they do business, the bank
expects to extend Digital Disbursements to other regions in the
future.
“clearXchange is pleased to support Digital Disbursements, an
exciting new use of the clearXchange platform that will make
payments easier, faster and more secure for both corporations and
their customers,” said Mike Kennedy, CEO of
clearXchange. “Our partnership helps keep Bank of America
Merrill Lynch at the forefront of innovation in the
business-to-consumer payments market.”
Bank of America Merrill Lynch offers a global suite of
electronic and paper-based disbursement solutions to help companies
optimize their working capital with greater precision and control.
Solutions include: low-value payments (Automated Clearing House),
wire transfers, cross-border payments and multicurrency payments,
as well as card solutions and ePayables. Furthermore, the bank’s
expertise in foreign exchange means that companies can make
international payments in over 140 currencies covering more than
200 countries and territories.
(1) Aite Group survey to 1,115 participants;
Business-to-Consumer Disbursements: Time to Take Notice, June 5,
2012
(2) Federal Reserve System, Research on End-User Demand for
Select Payment Attributes, 2014
(3) Javelin Strategy & Research, Mobile Payments to hit $20
Billion in 2012
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Reporters May Contact:Louise Hennessy, Bank of America Merrill
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