Wells Fargo Plans August Expansion of Real-Time Send Capability for P2P Payments

Four years after launching a peer-to-peer payments capability using the clearXchange network, Wells Fargo & Co. is enabling a real-time function for its service.

Announced Monday, the enhancement enables Wells customers to send and receive real-time payments with no fee from and to customers of any bank that participates in clearXchange. Wells, along with six other large banks, owns Early Warning, the clearXchange parent company. Real-time payments typically involve crediting the receiver within minutes of the sender initiating the payment.

Though Wells has offered P2P payments for four years, the distinction now is that payments will be made in real time, says Brett Pitts, head of digital for Wells Fargo virtual channels. “As we’ve offered those services, we’ve heard from our customers that they want an option to send money to family and friends at other banks, with real-time funds availability,” Pitts says via an email. Wells customers already can receive funds via the network in real time, but it had not made any funds Wells’ customers sent immediately available.

Pitts says the bank is testing the send capability with a limited group of Wells employees, with the expectation it will be finalized by Aug. 1. “The goal is to expand this service to as many banks—and banking customers—as possible, so that customers can more freely send money back and forth in real time,” he says. The service will be available on the bank’s mobile and tablet apps.

To use the service, the sender enters the recipient’s email address or phone number within the P2P section of the app. That generates a payment notification for the recipient. No account information is shared between either party. Generally, to use P2P payments on clearXchange, the recipient must create an account on clearXchange.com or at her bank.

Wells’s move is critical, says Talie Baker, an analyst at Boston-based Aite Group. “Banks need to stay current with the trend towards digital P2P services, particularly mobile, in order to keep their customers, especially the Millennials,” Baker says via an email.

“With services like Venmo, Square Cash, and even Facebook, consumers have many choices outside of traditional banking channels for P2P,” Baker continues. “As the non-bank services attract more customers, it’s likely they will expand capabilities to provide other traditional banking services. Our most recent research shows that most consumers today, across all generations, use bank-centric P2P payment methods, so the banks currently have a captive audience. They just need to focus on offering similar capabilities from a user experience perspective.”

Aite estimates the U.S. P2P market generates $1.2 trillion in annual volume.

The challenge with real-time P2P payments is connecting banks using disparate networks, Baker says. “There needs to be a way to connect multiple e-wallets and banking networks,” she says.