Why Wells Fargo’s business bankers need Zelle to succeed with consumers

Wells Fargo is in the midst of a big payments push. It's not just bringing payments to the front of the consumer banking app, it's fostering partnerships, seeking data-sharing agreements and promoting Zelle to improve its corporate payments services broadly. Well Fargo's offerings are around traditional ACH as well as realtime payments and fraud mitigation measures, like account validation. In realtime payments, there’s push-to-card, the card solution that allows a business to send a consumer a payment over their debit card over the wire rails; and Zelle, which Wells is making available to businesses to offer payments -- like refunds or benefit checks -- to customers. However, Zelle still needs to grow as a consumer brand to generate interest for corporate businesses to begin using it too, said Secil Watson, Wells Fargo’s head of digital solutions for business. For the past few months Watson has been working on improving payments services for its corporate customers: the fintech startups, small businesses and large corporations. That includes the March launch of its API developer gateway portal, which is open to developers of Wells Fargo’s customers that could become more active bank partners by using its APIs, as well as continuing to develop its data exchange partnerships with companies like Intuit. “We always say we’re open to partnerships but it takes a while to figure out where the value add is,” Watson said. APIs “create another bucket of focus, less about promoting to our customers but really utilizing the API gateway to facilitate partnerships.” Tearsheet caught up with Watson on customer pain points in moving money, the evolution of realtime payments and how it pitches Zelle to corporate customers while traditional marketing campaigns work on consumer interest. The following has been edited for length and clarity. What are the biggest pain points around payments banks currently face? The weekend. If the payment doesn’t happen on a Sunday I think not having it for days feels like a lag for people and that’s the way the payments have been. That’s the opportunity. Another is fraud. Banks still have the right to ensure they can clear a payment if they suspect fraud. A lot of times consumers don’t understand why a bank holds payments longer than they should, but it’s often because there are a lot of new accounts and a lot of consumers end up getting duped by them. That’s the kind of risk the banks are trying to mitigate in consumer payments to make sure the payments go out and into the accounts there supposed to go. What about for corporate customers? Reconciliation and accounting are critical. They need to reconcile who paid them, who they paid and be able to pay for it. It’s not just about getting the payment from A to B. You and I would think of it like buying coffee from a vendor, but for them the whole information system around the payments are important as well. What’s the business case for commercial customers to implement Zelle? Use cases we have seen implemented and seen interest in tend to focus on business payments to consumers on things like refunds, benefit checks or claim payments. These payments tend to be done by check historically. When you do a payment to a customer by check, there's a high chance of them getting lost in the mail or arriving at a consumer’s home but not getting deposited because they didn’t expect it. We have a lot of challenges around reconciliation. Zelle would provide the opportunity for our commercial customer to see the payment hit the customer’s email and know when it’s cleared and good to go — and they would only need to deal with exceptions of people that haven’t registered with Zelle. It looks like marketing and advertising Zelle is still focused on peer-to-peer payments. How do you market that opportunity to commercial customers? For consumers, we will be promoting Zelle through traditional marketing advertising campaigns; the more people in the network, the more interested our corporate customers will be interested in signing up. If you show they can only reach 20 percent of their customers through Zelle, that's not that interesting, but if you can say they’ll reach 85 percent of their customers, that becomes really interesting. How do you teach that to the business side? By using our typical channels to increase in the corporate use cases. Corporations don’t necessarily want to educate customers on the new payment type. People will just say, “No, no just send me a check,” and that’s what our corporate customers want to get out of. So it’s up to the banks and Early Warning Services to promote Zelle as a consumer brand. Payments and banking have long been separate but related. How does its evolution look from your view? Many parts of what the bank does is about convenient and secure access to funds and proving liquidity when customers need it from lending perspective. When you look at payments, it’s all about how you make the transactions happen as seamlessly as possible. When we looked at realtime payments, for a long time the industry wanted faster payments, and we didn’t have it. The U.S. has been behind in being able to offer RTP. Now we have multiple choices for what realtime payments can be applicable: ACH, push-to-card, Zelle — the newest is the Clearing House RTP which is a totally different new rail that is improving on some of the feedback customers have had around ACH.