Bank of America has upgraded the speed and range of its business-to-business payment capabilities to make sure its offerings meet the growing demands of international merchants.
The alternative would be to lose those clients to fast-moving fintechs.
"Treasury is not just a five-day business anymore," said Tom Durkin, global product head for CashPro Platform in Global Transaction Services (GTS) at Bank of America, adding the bank has noticed higher payment traffic for many of its business clients over weekends. "It's more of an on-time business."
Bank of America has expanded its CashPro application programming interface to improve the bank's ability to reach merchants that require payment processing in different countries and in broader time windows. At the same time, the bank made its online account-to-account payment feature Pay by Bank available for euro payments.
Cross-border payments are an attractive target for banks and fintechs, which can take advantage of emerging settlement schemes that make it easier to transact in multiple currencies. Fintechs also offer data-sharing technology that allows merchants to pair payments with other business functions. Banks typically have an existing consumer and business client base that allows them to compete with fintechs, and are ramping up innovation to improve their digital game.
Bank of America's CashPro API enables 24/7 processing for B2B and B2C transactions, with the bank noting its payments data from the existing API has shown 20% of these transactions happen between Friday evening and Sunday. The expanded API will extend payment types from 19 to more than 350 in the bank's 38 markets. It will also connect to seven real-time payment schemes; transfer apps including Zelle in the U.S. and Pix in Brazil; and cross-border wires. It will also support payments in bundles, a feature designed to mitigate backlogs of individual transactions.
"It's a big jump for us; there are a lot of clients that are paying internationally and want access to more data," Durkin said.
Bank of America's
The bank has added several
Bank of America has also updated Pay by Bank, a product that uses open banking, or API connections, to enable access to financial products from third parties through the same sign-on or user experience. As an account-to-account service, Pay by Bank does not require a card or card data.
The Pay by Bank euro upgrade is aimed at mobile users. Through research with financial technology firm Banked, Bank of America found more than 60% of consumers in Europe are shopping and making purchases through their mobile phone at least once per month with only their phone, and 70% of European consumers use their mobile phone as their primary channel.
"We're seeing a huge portion of consumers that use the phone as a primary or only device to shop online," said Chris Jameson, head of product management for global transaction services and treasury management for EMEA at Bank of America. "Consumers want their check-out experience to be simpler, faster and more secure. Merchants want options to deliver that."
A2A payments have existed for years, but are
"With Pay by Bank a consumer can receive a refund while still in the store, for example," Jameson said.
Bank of America's A2A option is powered by open banking. Open banking refers to networks of connections that allow data to transfer between banks and third parties with the consumer's permission. That allows the consumer to access financial services from multiple providers through their primary bank account. Open is driven partly by
While banks originally were cool to open banking, seeing it as contributing to a competitive threat from fintechs, banks are warming to the concept, leading to
"Pay by Bank would not be as successful in a non-open banking environment," Jameson said. "That's why we focused on Europe, which is the cradle of open banking,"
Pay by Bank euro currency payments are initially available in France, Germany and Spain, with other EU countries scheduled to be added in 2023.
As Bank of America expands its international payments capabilities, other initiatives are moving forward, creating broader momentum for cross-border digital payments as well as other potential alternatives. The Clearing House, SWIFT and EBA Clearing are
"There's a multiplicity of new challenges for banks, especially in cross-border payments and remittances," said Alistair Newton, a vice president and analyst at Gartner, adding digital payment firms such as PayPal, Alipay and Wise are mature, established alternatives that are often faster and less costly than banks.
"If the structure for cross-border payments is in place it enables the bank to provide much more value between the two points in a transaction," Newton said.
