By Kevin Eaton
Zelle transactions can now be cleared and settled over the RTP network, enabling companies to send transactions with a customer’s email address or mobile number without having to collect bank account information, Early Warning Services and the Clearing House announced today.
Bank of America and PNC Bank were the first to take advantage of the new payment option. Bank of America said the new capability will help consumers better manage their money and reduce the potential for late payments by giving customers more control over the timing of payments.
“The advancement of faster payments is really what we’re after here and doing so while improving the security and efficiency of the ecosystem,” says Mark Monaco, Bank of America’s head of enterprise payments. “It’s things like Zelle and RTP integration that open the door to more and more applications for faster payments.”
With the integration of Zelle and RTP, payments are sent to the RTP network based on information from Zelle and from Early Warning Services, and that information is used to send a payment to the receiving bank and they can immediately apply and immediately have settlement for, says TCH SVP Steve Ledford adding: “It makes it into a single stream process as opposed to a couple streams and it all happens at once so there is nothing to reconcile, nothing to tie back across two different processes.”
Corporate customers using Zelle to request a payment will not need to store and transmit a customer’s bank account information, increasing security during a transaction. “Instead, they can focus on transacting through the U.S. banking system with a customer’s email address or U.S. mobile number they use to enroll with Zelle,” says Chris Ward, EVP for treasury management at PNC.
By using Zelle, customers do not need to share their account information to send or request money, improving security for the customer and financial institution. “Ultimately, the more applications faster payments are enabled for should be a positive for both the consumer and the corporate customer. Importantly, the use of the alias—as opposed to having all these account numbers floating around in the wild—really should help reduce risk,” said Monaco.
Not having to remember bank account information is seen as a boon to customers as well. PNC sees an eventual possible use of Zelle as simplifying the new-hire process for businesses. “Your first day of work, most people don’t show up with their [International Bank Account Number] account memorized, but they know their mobile number and email address,” says Ward. “If you can set up an employee to be paid electronically just using their mobile number or email address, that reduces a huge barrier to onboarding that employee.”
The ability to pay bills through Zelle is seen as another advantage to the integration, with real-time bill payment allowing business to reduce the cost of collections with fewer paper bills and postage.
“Customers can get bills to consumers and be able to pay them back via real time payments making the whole experience a much more rich experience for the biller and the consumer,” says Ward. “There is no more ‘I didn’t get my payment,’ ‘I didn’t get the bill,’ ‘I didn’t get the payment applied.’ It’s just going to create a really rich experience for everybody.”
