Bank of America Corp., which spends about $1 billion a year handling cash, will save money and require fewer employees as more customers make payments electronically, Chief Executive Officer Brian Moynihan said.
“This is just the reality: the more electronification, the less people,” Moynihan, 56, said Thursday in an interview on Bloomberg Television. “It’s the way we’ve gone from 280,000 people to 211,000.”
Bank of America is among large lenders including JPMorgan Chase & Co. and Wells Fargo & Co. that are part of clearXchange, a payments network that connects 100 million online banking customers and allows them to transfer money instantly from one account to another. The banks are hoping the partnership will mount a real defense against the growing popularity among millennials of services such as PayPal Holdings Inc.’s Venmo, while also cutting costs.
“It’s more secure and more safe if people are carrying less cash,” Moynihan said. “But the methodology of transfer has to be easy, and that’s what we’re developing.’
Moynihan said the idea is to make such person-to-person payments “as ubiquitous as checks.” He said clearing checks, keeping automated teller machines stocked and providing merchants with currency make up the bulk of the firm’s cash-handling costs.