A 3-year-old Philadelphia company called PayQuik Inc. wants to make it easier for all banks, not just the big ones, to enter the money transfer market.
PayQuik runs a Web-based money remittance operation for several foreign banks, and this fall it began soliciting business from U.S. institutions. It says that for nominal fees banks can use its technology to let customers transfer funds in and out of their accounts from 25 countries, including India, Mexico, and Brazil.
Over the last year several large retail banks — including Bank of America Corp., Citigroup Inc., U.S. Bancorp, and Wells Fargo & Co. — have moved aggressively into the money remittance business, taking aim at the decades-long dominance of First Data Corp.’s Western Union.
While those banks have developed their services in-house, in some cases creating card programs with Mexican partner institutions, PayQuik says banks of any size can afford to offer the same if not better service with its ready-to-go platform. PayQuik’s system transfers funds exclusively over the Internet. Users — whether consumers themselves or bank representatives for them — can log on through a bank-branded Web site, where they can pick the language they want to use.
“For a small up-front fee and transaction fees, we’re giving banks the infrastructure that any large bank could probably deliver after years of time and millions of dollars,” said PayQuik’s chief executive, Bhairav Trivedi. “Our model is equivalent to First Data or TSYS, which took small credit card banks and said, ‘You can play like the big boys in this market, and we can provide you with anything you need.’ ” He said the system can accommodate the use of stored value cards.
PayQuik would not say how much it charges banks but says its fee schedule leaves ample room for banks to price higher. Banks that see the service as a way to drive fee income will charge more, and those that see it as a way to acquire or cross-sell to deposit customers may charge a small fee or none at all, said Jeff Slowik, a PayQuik executive vice president.
Neil Platt, a vice president at CashEdge Inc., a technology company that facilitates money transfers across U.S. bank or brokerage accounts, said most of its customers, including Citigroup, charge fees on certain transactions, especially outbound ones. Fees tend to vary by customer segment; for example, transfers may be free for wealth management clients and $10 for basic checking account customers.
On the whole, Mr. Platt said, banks tend to charge between $1.50 and $1.99 per transfer. “They equate it to an ATM fee.”
PayQuik, which originally conceived itself as a vendor to Internet portals, said that check cashers and other agent networks began approaching it in search of a cheaper alternative to Western Union. PayQuik says its cut of each transaction is “very easily 50% less than Western Union’s.”
According to the company, roughly 20 foreign banks with few or no branches in the United States use PayQuik so that their customers can deposit money from the U.S. Mr. Slowik would not name any customers.
Mr. Trivedi said PayQuik can have a bank’s site running in four to six weeks. He also said its Web system handles upgrades much more easily than the software-based programs that most banks use.
