Big banks have banded together to battle back against the rising tide of payment start-ups.
Seven banks have invested in a digital payment network to launch a peer-to-peer mobile product to help them fend off a growing number of start-ups elbowing into their space. Smartphone-based peer-to-peer payment between banks' apps is expected to launch for most firms this summer, and represents a growing challenge from Wall Street to fintech firms like Square and PayPal.
BB&T, Wells Fargo, PNC Financial Services Group, Capital One, Bank of America, JPMorgan Chase and US Bancorp are participating in the new clearXchange network, representing 60 percent of the current mobile banking market. The bank-run payments service merged last year with risk management system Early Warning, which was backed by another consortium of American banks, bringing the total tally to seven banks on the project.
"By using this, you'll be able to send seamlessly between banks," said Gavin Michael, head of digital for JPMorgan Chase, one of the banks in the clearXchange network.
Representatives of US Bancorp, BB&T and Wells Fargo confirmed their participation. The other banks did not respond to a request for comment.