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Wells Fargo, Chase, Bank of America jointly launch PayPal rival

Wells Fargo, Chase, Bank of America jointly launch PayPal rival

The clearXchange service is now available to partners and will be rolled out nationally at an undisclosed time

Three top U.S. banks are collaborating on a service that will allow the transfer of funds by simply logging in to a personal online bank account and entering the name and mobile phone number of the person receiving the money.

A direct assault on person-to-person cash transfer industry leader PayPal, the service will be rolled out by Bank of America, JPMorgan Chase and Wells Fargo, which formed a new venture called clearXchange to create the product.

The called clearXchange service, said to be the first bank-owned product of its kind, was made available to partner businesses yesterday. The banks dod not say when the service will be generally available.

Banks customers will be able to move funds directly from their existing checking accounts by using an email address or mobile number -- listing checking account and routing numbers are not necessary. The service will eventually be rolled out nationally and there are plans over time to expand it to include other financial institutions and endpoints.

"This is an innovative game-changer in electronic payments," Mike Kennedy, head of payments strategy at Wells Fargo, said in a statement. "We want our customers to be able to easily send money to anyone without having to establish a new account outside their primary bank."

Financial terms of the three-bank partnership were not disclosed, but clearXchange is to be located in Charlotte, N.C., where Bank of America is headquartered.

"By creating a utility like clearXchange, we are able to meet the needs of our customers and differentiate our capabilities from other offerings in the marketplace," David Owen, eCommerce, Claims and Fraud Executive at Bank of America, said in a statement.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian, or subscribe to Lucas's RSS feed . His e-mail address is lmearian@computerworld.com.

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