Bank of the West is planning
to offer its small-business customers an ACH payment service that
could make costly wire transfers unnecessary. The San Francisco
banking company is developing an online banking service for small
businesses that will be built around a new money-transfer service
from CashEdge.
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Moving to ease the burden of small
business invoicing and payments, Bank of the West is developing an
online invoicing and ACH payment service with CashEdge that could
make costly wire transfers unnecessary and help automate what
currently is a laborious paper-based process.
San Francisco-based Bank of the
West turned to CashEdge to partner on the solution, which promises
to alleviate one of the most costly burdens for small businesses
who make an average of 20-50 payments a month, each requiring a
separate invoice and cheque or wire transfer payment
transaction.
The new service will be embedded in
Bank of the West’s small business banking website and integrated
with its checking account system. The new solution won’t require
small businesses to use their account number to log in. Instead,
they can use an email address or phone number as a token ID to
access a payables dashboard that will show all of a company’s
outgoing and outstanding payments.
When a customer sends payments,
they can attach an email with the company logo and payment
information and also generate official invoices with the push of a
button. The service will accommodate multiple payment options,
including batch and recurring, and it will allow customers to
manage payees and roles. Recipients can pay the invoices using
CashEdge’s PopMoney service.
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By GlobalDataCashEdge will provide a risk
management feature that monitors transactions and compares them
against a database of multiple financial institutions’ activity to
find fraudulent transactions and patterns of behaviour, ideally
identifying and stopping risky transactions before they’re able to
conclude.
At many financial companies, small
business customers fall somewhere between the free online banking
sites for consumers and the cash management services for big
corporations that generate significant fee revenue, said Matt
Macomber, multi-channel banking manager at Bank of the West.
“We have a strong package of
consumer online banking solutions and solutions for larger
commercial firms up to the $10m revenue size or so, but we see a
real opportunity for a dedicated small business platform,” Macomber
said. “We’re building a simple, straightforward solution, but one
that the small business can use to ease a lot of the day-to-day
burden of handing payments.”
Bank of the West has some small
business customers on a version of its consumer system, and
Macomber said some of them would be willing to pay fees to send
transfers through the new service, particularly if such services
are embedded in a broader offering that provides electronic
invoicing and speedier transactions.
The bank, a unit of BNP Paribas
SA’s BancWest Corp, has offered consumers ACH payments over
CashEdge’s Popmoney product, which lets people send each other
money, routed to their email address or phone number since
June.
A later version of the small
business Popmoney system will allow businesses to create invoices
that can be paid through Popmoney. This is expected to go live in
January and Bank of the West plans to introduce it in the first
half of 2011.
Popmoney for Small Business
provides businesses with the unique capability to pay vendors and
employees electronically using only an email or mobile number. They
may also pay using an account number. Popmoney for Small Business
will also allow small businesses to conduct invoicing, receive
payments via ACH or credit card, make and track payments, send
invoice reminders and view payment history – all directly from
their bank’s online banking portal or mobile application through
the Popmoney platform.
“Business owners want financial
tools that are simple to use and that make running their businesses
easier. The invoicing and payment solution we are implementing will
do just that,” said Macomber.
“We have had wide adoption among
our retail customers since deploying Popmoney last spring. We’re
excited that soon the same convenient service will be available to
our small business customers. We’re confident that by launching
this service we will continue to provide the most innovative and
valuable services to all our customers.”
Several additional financial
institutions have plans to launch Popmoney for Small Business in
the next six months. This swift adoption follows the success of
Popmoney for consumers, which launched in December 2009, and will
be live at more than 175 banks, including three top 10 banks, by
the end of the 4th quarter.
“We believe it’s all about the
network,” said Catherine Palmieri, global head of product and
marketing at CashEdge. “Our Popmoney consumer offering has been a
tremendous success; with Popmoney for Small Business, businesses
can send payments and invoices via email and mobile, and get paid
faster electronically. For banks, the advantage is that money moves
seamlessly between their consumer and small business customers –
providing greater engagement and loyalty on both sides. We’ve
worked very hard to make the interface extremely easy to use, and
we believe that will drive greater adoption on both sides.”
Macomber praised CashEdge for
concentrating much of its efforts on usability of its mobile money
product.
“They [CashEdge] have a really
solid risk management profile; they are very good at mobile
payments and they offer turnkey solutions to banks like us, who
want to turn this stuff around quickly,” he said. “They focused on
money movement at first, but now they are really working hard on
just making it simple.”
Bank of the West also plans to
allow businesses to delegate different levels of access. Macomber
explained that this would allow a business owner to let an employee
track which invoices have been paid without giving them full
control of the business’ funds.
“The goal is to develop a platform
that is as easy to use as the customer’s personal online banking
experience,” he added. “We’re in the design phase now, and that is
on everyone’s mind as we move forward.”
Palmieri said: “We see the value of small businesses as the next
extension of the Popmoney suite. It adds the ability to use email
and mobile to the business payments landscape, which is a huge step
forward.”
