With U.S. Bank, Zelle takes a bigger step into the corporate world

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Since Zelle's earliest days as the clearXchange network, the banks behind the P-to-P platform have promised that it could have a role in the business world.

Bank of America took the first steps back in 2014, and U.S. Bank has begun the next chapter by offering Disbursements via Zelle as a quicker way to handle corporate payments than paper checks or ACH transfers.

For consumers, Zelle's system of using phone numbers and email addresses to identify recipients is clearly easier than using account numbers. But for businesses, it may not be, and this presents a challenge for any bank working to offer Zelle in a corporate setting.

“We’re working with corporations to educate them on the importance of keeping their databases current with contact information for customers they may be sending payments to via Zelle,” said Sayantan Chakraborty, a senior vice president at U.S. Bank who is head of product for global treasury management.

This problem should go away as consumer awareness of Zelle grows, according to U.S. Bank's research.

“For a whole generation that’s very comfortable doing everyday transactions with a mobile device, Zelle will be a good fit for corporate disbursements, too,” Chakraborty said.

Insurance payouts and emergency payroll payments are among the top use cases U.S. Bank expects for some of its corporate clients. The bank’s Disbursements via Zelle, announced Wednesday, enables corporations to send payments to any payee with a bank account in the U.S., either in real time or the next day.

Real-time digital disbursements are a hot area right now in the war on costly, slow checks, which still account for at least half of all corporate payments, said Talie Baker, a senior analyst with Aite Group.

“There are many fintech players entering the market to provide solutions, and banks are hoping that Zelle will help them fight off competition as well as capitalize on the branding momentum,” she said.

The capability for corporations to instantly send funds to consumers’ debit accounts isn’t new, but it’s still a relatively new method for corporations reimbursing consumers, who are more accustomed to receiving a check or providing bank account details to get paid.

Insurance payouts are the most commonly discussed use case for corporate disbursements via Zelle, but nearly any type of corporate payment could ride Zelle’s rails, said Sarah Grotta, director of debit and alternative products at Mercator Advisory Group.

Simultaneous with its launch of Disbursements via Zelle, U.S. Bank is introducing another business-payment upgrade with Supplier Prefer Pay, a solution that consolidates its existing separate processes for corporations enrolling suppliers for payment, and paying them, into a single platform.

Bringing together the enrollment and payment processes of its payments for business-to-business buyers and sellers has been in development for some time, Chakraborty said.

“We’ve integrated our supplier capability to create an ecosystem so payments flow more easily for parties through the same platform,” he said.

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P-to-P payments B-to-B payments U.S. Bank