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Cheaper than Checks

Bank of America Merrill Lynch, Fiserv roll out products allowing companies to pay consumers via email, cell phone.

By Susan Kelly | Updated on November 11, 2014
For years, consumers have been able to send payments electronically to friends or family members via an email address or cell phone number. Now companies are starting to catch up. Last month, Bank of America Merrill Lynch rolled out a product called Digital Disbursements that lets companies substitute such payments for checks, and Fiserv announced a business version of its person-to-person payment product, Popmoney.

The new offerings are seen as a way for organizations to more easily and cheaply make a range of disbursements to consumers. Possible uses include companies paying rebates and insurance claims, companies refunding overpayments, and governments doling out tax refunds.

An Aite Group survey conducted in 2012 suggests there’s a considerable opportunity in this area. Working from data that it gathered by surveying 1,115 U.S. consumers, Aite estimated that U.S. companies made $2 trillion worth of disbursements to consumers in 2011, while government entities paid out $1 trillion.

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