JPMorgan Chase & Co. has joined U.S. rivals including Bank of America Corp. and U.S. Bancorp in letting customers transfer money between the lenders in real time, challenging ventures including PayPal Holdings Inc.’s Venmo.
JPMorgan, whose Chase QuickPay product handled $20 billion in peer-to-peer transfers last year, began offering the service Sunday after customers requested it, said Barry Sommers, chief executive officer of the firm’s consumer bank. U.S. Bank and Charlotte, North Carolina-based Bank of America have been offering the same service since March, the companies said.
More lenders will likely join soon, said Mary Harman, managing director of payments at Bank of America. She also is chairman the management committee of Early Warning System, the bank-owned group that runs clearXchange, a digital network that enables the real-time payments.
“We’re poised to move pretty quickly,” Harman said in a telephone interview. “You’re going to see the next wave of banks coming online here en masse, in the next 30 to 60 days.”
‘Awkwardness of Cash’
Banks understand they need to become more user-friendly to compete with fintech companies like PayPal, which owns money-transfer app Venmo, said Wayne Johnson, a Raymond James Financial Inc. analyst based in Atlanta.
“The banks realize in general that everything is moving toward mobile, away from traditional branches, and they’re trying to offer as many” services as possible, Johnson said.
PayPal shares dropped 0.6 percent to $36.54, near its lows for the day. The company’s three digital wallets — PayPal, Venmo and Xoom — handled $41 billion of peer-to-peer transfers last year, it said in a statement.
“We welcome any developments that help people move away from the awkwardness of cash,” PayPal said Monday. “We are a major partner to the banks to make that happen.”
By Jenny Surane