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The tide may be turning against financial technology start-ups.
Wall Street banks are reclaiming market share from competitors in the form of billions of dollars in peer-to-peer payments. They've done so by simplifying how consumers transfer cash between each other.
Bank of America has processed $16 billion in mobile payments so far this year, CEO Brian Moynihan said in a speech at the Alliance Bernstein Strategic Decisions Conference in New York Thursday. Institutional players' push to take business back from mobile competitors is only just beginning.
This encompasses the bank's peer-to-peer payments, as well as other forms of digital payments, like mobile checking. When asked about the bank's mobile initiatives, Moynihan said the bank is "still investing" in digital development. He also pointed out that, for more popular methods of consumer payments, like checks, mobile options are becoming increasingly popular with the bank's customers.
Much of the $16 billion BofA processes in peer-to-peer payments is via the newly launched ClearXchange platform, a consortium of U.S. banks that banded together to use the same technology to allow consumers to transmit funds digitally. It lets bank customers transfer money between each other simply by using their mobile phone number or email address.
If it catches on, it could represent a threat to major financial technology companies, like PayPal.
ClearXchange's digital cash transfer program was launched earlier this year. It's a payment network that consisted of seven banks making up 60 percent of the mobile banking market. Other banks on the ClearXchange network include JPMorgan Chase, US Bancorp, Wells Fargo, BB&T, PNC and Capital One.
"We're going to have a real time system up and running," Jamie Dimon, JPMorgan Chase CEO said, at the same conference where Moynihan spoke, referring to ClearXchange.
The advantages banks provide consumers via ClearXchange will include a real-time payment function and the availability of larger cash denominations for transfer. However, not every bank on the network has fully implemented its services; roll-out will continue for consumers across 2016.
A ClearXchange representative declined to comment on the network's activity.
Bank of America is not the only bank seeing its mobile consumer business flourish, as Wall Street fights to reclaim the business of billions of dollars' worth of transactions from fintech companies.
Prior to the ClearXchange launch, JPMorgan Chase used its QuickPay application to help consumers transfer cash between accounts; a representative for the bank said that its customers processed $20 billion in transactions this way last year, but that this is only a fraction of the bank's total mobile banking payments processed. Chase launched QuickPay in 2010.