BNY Mellon launches pay-to-wallet option for banks

BNY Mellon launched a pay-to-wallet technology option that enables banks to send funds directly to customers’ digital wallets and other wallet addresses using the bank’s payments infrastructure.

Announced recently, the capability is built into BNY Mellon’s payments platform and connects banks with wallet providers and the networks that deliver funds to consumers and businesses. The bank described the feature as an expansion of payout options beyond checks and card networks.

BNY Mellon positioned the option for payroll, vendor and corporate payouts, refunds and peer-to-peer transfers. The technology supports routing and orchestration of pay-to-wallet instructions so banks can select the most appropriate network or wallet endpoint for each transaction.

The service includes controls designed to help clients meet regulatory and risk requirements while integrating with existing bank systems. Banks can keep custody and reconciliation functions in their back offices while outsourcing routing and connectivity to BNY Mellon’s payments infrastructure.

BNY Mellon will support links to a variety of wallet types and partner networks and said clients can set controls for onboarding wallet endpoints and for transaction-level monitoring. When wallet networks and instant rails are used, pay-to-wallet transfers can shorten the time between initiation and availability of funds.

Industry observers have noted rising interest from banks in payment options that reduce friction and lower costs for immediate and on-demand payouts. The bank framed the capability as an additional channel for delivering cash to a recipient-controlled wallet address rather than to an account number or card.

The pay-to-wallet option will be offered to bank clients through BNY Mellon’s existing commercial channels and payments platform.