Bank of America Merrill Lynch is tapping the technology behind its P2P payments service to launch a system that lets companies send money directly to customers' accounts using their mobile number or email address.
Most middle-market, large corporate and public sector bodies still rely on cheques to get funds for rebates, refunds and claims payments to their customers.
BofA Merrill Lynch says that its Digital Disbursements offering - based on its P2P payments system developed with clearXchange - will make it quicker and easier for corporate clients to get funds to customers and slash end-to-end disbursement costs by as much as 75%.
In addition, because companies hold only the customers' mobile phone number or email address, the system does not require them to obtain and store sensitive bank account information.
BofA Merrill Lynch argues that this is a major benefit for users, citing a recent Federal Reserve study which found that 85% of consumers and 81% of businesses prefer not to provide bank account information to the payee.
The bank also cites the rise of m-banking - which Javelin Strategy & Research expects to be used by 63% of the US mobile population by 2018 - as an argument for the move away from cheques.
Bill Pappas, CIO, global wholesale banking technology and operations, BofA Merrill Lynch, says: "By leveraging proven technology, we were able to develop an innovative solution for our corporate clients which speeds the payment process from several days to only a few minutes."
The service will initially only be available for payments within the US but is expected to gradually be rolled out in other parts of the world.