Electronic payments providers have long seen the world in terms
of either consumer-to-business payments, business-to-business or
person-to-person (P2P). But those lines are blurring as
technological advances, particularly with regard to fraud
prevention and detection, make it cost-effective to offer a host of
online payments options.
CashEdge made its mark on the payments business back in 2001 by
creating technology that allows consumers to move money between
their retail accounts at different financial companies, but not to
each other.
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Now CashEdge has introduced a pair of new transfer technologies
– one facilitating P2P funds transfers, another aimed at small
businesses.
Cornerstone of the new money movement platform is what CashEdge
calls Intelligent Money Movement (IMM) – an enhanced version of the
transfer platform that provides consumers and small businesses
simple, seamless access to conduct electronic money movement
through online and mobile banking applications.
IMM provides a single point of access through a financial
institution’s online banking portal or mobile application for
multiple easy-to-use consumer and small business transfer routes
including new account funding, me-to-me transfers, third-party
transfers, employee and vendor payments, invoicing and customer
payments.
Behram Panthaki, CashEdge senior director of strategy and new
ventures, and Neil Platt, the company’s senior vice-president and
GM of US banking, discussed the new offerings with EPI.
The executives said the third-party transfer service is being
piloted at a major US bank and would soon be released to CashEdge’s
clients.
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By GlobalDataPanthaki said IMM is designed to allow financial institutions to
rapidly introduce new services in response to evolving market
demands, helping them quickly respond to evolving consumer demand
for new, easy-to-use money movement capabilities.
The turning point, he said, was CashEdge’s increasingly
sophisticated risk management capabilities that leverage
proprietary technology and the insights gathered from managing
money movement risk for the world’s largest financial
institutions.
Third-party transfers, a modular add-on to CashEdge’s
TransferNow product suite, enables financial institutions to offer
customers the ability to make secure funds transfers directly from
a customer’s account to third party accounts held at other
financial institutions.
“Our common risk management architecture unleashes the potential
for financial institutions to rapidly introduce new transfer
modules with ease, by simply switching on a new configuration
setting,” Panthaki said. “We expect to launch multiple new transfer
modules to our financial institution clients as we continue to
create new transfer routes for funds transfer.”
Platt said such new products are possible because of advances in
fraud detection. As CashEdge has gathered more transaction data, it
has become easier to determine which transfers fit the patterns of
normal use and which are likely fraudulent, and that improvement
has made possible its P2P service. In the next year, by allowing
people to send money using just an e-mail address or phone number,
it will eliminate the requirement that senders know a recipient’s
account number.
“The more transactions we move, the more we learn and the more
we can do,” Platt added. “It is a world in which banks can regain
their centrality in the payments market, because the financial
institution can become the hub and offer these bank-branded
transfer tools off their own sites.”
In addition to the P2P third-party transfers, CashEdge launched
Small Business Me-to-Me Transfers, an online funds transfer product
designed specifically to help financial institutions meet the needs
of small businesses.
The product provides automated identity authentication and
funding account verification processes that satisfy all business,
risk and compliance requirements, enabling small business customers
to transfer money between their accounts held at over 23,000 banks,
brokerages and credit unions via the automated clearing house (ACH)
network.
Small Business Me-to-Me Transfers is an addition to CashEdge’s
TransferNow platform, which has been adopted by more than 600
financial institutions and processed more than $38 billion in
online funds transfers in 2007. CashEdge’s flagship retail banking
product, Consumer Me-to-Me Transfers, which has been available to
consumers for over eight years, is currently used by five of the
nation’s top 10 financial institutions.
“Today, more than 60 percent of small businesses bank online,
and these business owners are looking for online capabilities that
provide greater control over their cash management activities,”
Platt said.
“Financial institutions that offer small business customers
these types of services are able to grow their customer base and
generate new fee revenue through an extremely profitable
service.”
Small Business Me-to-Me Transfers enables small business owners
to choose between different transfer options. These include
next-day funds transfers for urgent cash flow needs and one-time,
recurring and future-dated transfers for improved overall cash flow
management.
CashEdge views these new transfer capabilities as the logical
next steps in helping banks reassert themselves in bill payment
services, making it possible for consumers to make electronic
payments to each other as easily as they can to billers, and
removing the need for bank customers to send payments through
third-party non-bank firms.
“People have turned to non-bank alternatives because they didn’t
have a choice,” Platt said. “If the same P2P option is available on
your bank’s site, that is a clear value proposition.”
Panthaki said that another goal of Intelligent Money Movement is
to cut through the dizzying array of options that consumers now
face when paying one another. Today a consumer who wants to move
money online must first decide upon a method – ACH, wire,
third-party payment provider, and others – but CashEdge’s platform
will make that decision for the consumer.
“We like to say that we are creating the ‘Fedex’ model of money
movement,” Panthaki added.
“We really believe that having a single user experience with
holistic risk management across the spectrum is the way to make the
experience user-friendly and intuitive for the consumer.”
Charles Davis
