Short Blog – US Paze and RTP – Consumer Terms

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New consumer terms rolled out at several banks this week. As the former head of online and payment services at Wachvoai (40%+ of Wells) I had managed these agreements. Changes are a very big deal, usually less than once per year. Given my history with Wachovia I chose to review the Wells Fargo below agreement (JPM, BAC, and COF all have similar).

https://www.wellsfargo.com/online-banking/online-access-agreement/

Key points

PAZE

  • Consumers have auto Opt in to Paze for all accounts
  • eCommerce Only wallet with “identity verification” (ie see 3DS/blog)
  • Very heavy, even shocking, data sharing language in section 10c
  • Card agnostic (no mention of V/MA)
  • Information will be transmitted through the card network. While this is obvious for card, I was quite sure that PAZE was working to ensure neither V/MA would gain additional data and that PAZE would work to create a separate authorization mechanism to support non card payments. Perhaps that is next year.

New TCH RfP – Instant Bill Payments

Section 6i is worth a read. New instant bill pay service is rolling out.

“The provisions in this Section only apply to the Bill Pay instant payments service, which may use the RTP® network operated by a third party, The Clearing House, or another third party network. If available for your participating biller/payee (payee), the Bill Pay instant payments service lets you send a payment from your Eligible Account that is an eligible Wells Fargo checking account to a participating payee in response to the payee’s request for payment. “

Key Points

  • Looks to be an “opt-in” service as well. As billers “turn on” TCH RTP.. they will perform some sort of consumer match from the recurring payment information and enroll consumers in a form of e-bills that allow instant payments.
  • No consumer fees
  • Large TCH banks must have completed the 2 yr project of mapping DDAs to RTPAs to enable.
  • Recurring payments is a great way to start RTP.. minimal fraud, high volume.
  • Business model is commercial/wholesale. Improved funds availability and improved ability to charge.
  • Control point is online banking.. RfP has the potential to disintermediate cards if a start up could gain access to real time RfP.. an online merchant could send “eBills”. The only way to approve an eBill is through the consumer’s online banking.. hence this is a great barrier to new transaction types that would impact bank revenue

Thoughts appreciated

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