ExcheQ in Great Lakes Community Banker Magazine
The P2P Payment App Built By Community Bankers for Community Bankers
The following appears in the December 2020 issue of Great Lakes Banker magazine
Cash is no longer king, at least not the paper money that used to dominate transactions. Our increasingly digital world has brought with it a demand for monetary transactions that can be completed without money literally exchanging hands. Many Peer to Peer (P2P) payment services have cropped up to meet this demand, offering consumers the digitally convenient transactions they desire – the ability to pay with the click of a button instead of a fistful of cash.
North American Banking Company (NABC), and Minnesota-based software development company, Design Center Inc. wanted to help community banks offer an innovative solution to their customers. Seeing the opportunity to provide this underserved market of small and medium-sized community banks with a simple, affordable and secure P2P service, ExcheQ was created. A partnership with United Bankers’ Bank (UBB) helped expand the footprint.
Banks looking to stay competitive and provide a P2P offering to their customers are wise to do so, with one caveat: not all P2P services are created equal. Many P2P platforms cater to the largest financial institutions and it shows. The frustration of navigating the P2P marketplace with its murky pricing, transaction fees, required core integration, and long implementation schedules are common complaints from small and medium-sized community banks.
Rapid, Simple Implementation
The ExcheQ app was developed by community bankers with community banks in mind; rapid implementation, ease of use, and transparent, affordable pricing were at the forefront of the app’s development. The platform utilizes a bank’s existing ACH infrastructure, eliminating the need for complicated integrations and long implementation schedules. With ExcheQ, implementation takes just a matter of days compared to the weeks or even months of other payment apps. That way, your customers can start taking advantage of the P2P service faster.
ExcheQ facilitates transactions directly from one account to another. And it is a secure transaction between the sender’s bank and the recipient's—with no third-party holding accounts or credit cards involved. Compatible with all core ACH processing systems, ExcheQ provides app users with the benefits of faster payments, same-day settlement, and quick setup and implementation.
Send Money in Just a Few Taps
With the experience of creating 300+ applications, Design Center knew that providing a cross-platform app that was intuitive to use was critical for adoption. Customers can pay friends and family in just a few taps once they have installed the app from either the App Store or Google Play and have received a confirmation code from their bank. The payee will receive a text and/or email with a link to securely enter their account information and accept the payment. An additional benefit of using ExcheQ is that the payee doesn’t need to download the app or enter anything but their routing and account numbers to receive their payment, which will be in their account in one business day or less.
As P2P services continue to increase in popularity, so too do their uses. What may have begun as a convenient way of paying a friend your half of the dinner bill has evolved to a contactless way to pay for necessities like rent and other household services. Cash may no longer be king, but P2P services are the new heir, especially during the pandemic when customers are looking for contactless payment options.
FedNow on the Horizon
The Federal Reserve has been working on an instant payment service – dubbed FedNow– that will enable financial institutions of all sizes to provide fast and secure transactions in real-time. Through institutions participating in FedNow, businesses and individuals will be able to send and receive instant payments conveniently, offering greater flexibility in money management. Further, these institutions can use FedNow as to provide the instant payment services customers want. However, the FedNow Service is not anticipated to hit the market until 2023 or 2024. (For more information, check out the Federal Reserve (https://www.frbservices.org/financial-services/fednow/what-is-fednow.html).
Now is the time for community banks to invest in P2P for their customers. Demand for touchless transactions continues to grow due to their convenience and security – and concerns for physical safety amidst a worldwide pandemic. Signing up with an established service like ExcheQ is a great way to establish a pilot program in anticipation for the launch of FedNow.
But what about widely available and popular third-party competitors like PayPal and Venmo? Your customers likely use or have used these services and may even have undeposited balances waiting to be transferred. With ExcheQ, such third-party exchanges are not necessary since money is directly routed to from one bank account to another. Cutting out the middle-man is one more added benefit that gets passed on to customers.
ExcheQ’s pricing is transparent, simple, and based on a tiered scale corresponding to a community bank’s asset size. The total costs consist of a licensing fee, a one-time platform set-up fee, and a low monthly fee. And the best part for your customers? ExcheQ does not charge transaction fees for sending or receiving money.
|Bank Asset Size||$ 100,000,000||$ 300,000,000||$ 500,000,000|
|Average Equity*||$ 10,290,000||$ 30,870,000||$ 51,450,000|
|ROA**||$ 970,000||$ 2,910,000||$ 4,850,000|
|ROE***||$ 974,463||$ 2,923,389||$ 4,872,315|
|3 Year Cost of ExcheQ||$ 12,500||$ 16,000||$ $19,000|
Conclusion: The cost of Excheq has minimal impact on earnings
*Uses FDIC Quarterly Banking Profile Average Equity to Assets for 9/30/2020 of 10.27%
**Uses FDIC Quarterly Banking Profile Average Return on Assets for 9/30/2020 of .97%
***Uses FDIC Quarterly Banking Profile Average Return on Equity for 9/30/2020 of 9.47%
For more information about ExcheQ and to see a demo, visit https://excheq.com or call us at 651-636-9654.
ExcheQ P2P Platform Features:
- Uses existing infrastructure – no complicated integrations
- Leverages Same Day ACH
- Can settle within traditional ACH windows
- Your bank can set a daily request and dollar transaction amount
Benefits of the ExcheQ P2P Payment Platform:
- Available to your customers quickly in a matter of days, not weeks or even months with other apps
- Affordable – limited costs
- Allows for same day settlement
- Customized online portal to conveniently enroll your bank’s customers
- Strengthen customer relationships
- Expand your bank’s payments strategy
ExcheQ P2P App Features:
- Add and manage payees
- Initiate requests
- Keep track of payment requests
- No third-party holding accounts or credit cards needed
Benefits of the ExcheQ P2P App:
- The app is not required to receive payments
- Zero fees to your customers to send or receive money
- Transaction data is not stored
- Provides a safe, secure and convenient way to pay friends and family
- Available in the Apple App Store & Google Play
What Other Bankers Are Saying About ExcheQ
“The ExcheQ team made the implementation process seamless. They provided outstanding training so we can successful and efficiently manage our customers’ transactions. The app works exactly as they said would.” Jeff Wessels, President and COO, Crown Bank
“ExcheQ allows community banks to continue to adopt modern technologies to compete and provide what any mega bank offers.” Ali Bram, Operations Manager, Rushford State Bank
“ExcheQ implementation is easy for the sponsoring FI. Set up a couple of internal email addresses, provide a logo and a public IP. If you can receive files via SFTP and route them to your ACH system, you can be processing transactions within a few hours.” Adam Sandberg, Information Technology Officer, Bridge Community Bank
“Our customers like the app a lot. It’s free for them to use, they aren’t charged a fee per transaction or even a monthly fee. That alone I think got people to sign up, because who doesn’t like free? The other thing they like is whoever they send money to doesn’t need the app to receiver their money, unlike other person to person money apps. Our customers also like that fact that the money is transferred the same day.” Jeff Henning, Teller/Bookkeeper, Welcome State Bank