PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

The Surprising Thing That Costs Bank of America $5 Billion a Year

By Sarah Grotta
January 23, 2017
in Analysts Coverage
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Woman's hand holding a smart phone.

Something that the public at large is generally not aware of, but that the payment industry knows all too well is that moving little pieces of paper around- like checks and dollar bills- is a rather expensive activity. As was pointed out in Motley Fool, when you are a really, really big bank, like Bank of America, the costs can add up:

In the fourth quarter of last year, Bank of America (NYSE:BAC) didn’t earn $4.3 billion from one customer in one transaction. It instead earned a few cents each time customers used their debit or credit cards to make purchases. Or it earned a handful of dollars each time customers over-drafted their checking accounts, which probably happened tens of thousands of times.

The point is that each incremental addition to its top and bottom line was small. But because there were so many of them, they added up to a big number.

The same is true on the expense side. Bank of America CEO Brian Moynihan made this point in a recent interview on CNBC when he mentioned how much the bank spends each year on the mundane task of handling cash and checks:

We still spend about $5 billion moving cash, currency, and checks around our company. Our ATMs distribute about $200 million a day in cash. Do you know how much work it is to get that cash in those machines?

It only makes sense that financial institutions put good strategies in place around to reduce the cost of managing cash and checks. It’s also important to optimize the experience when consumers do use these older payment forms. Consumers are using cards, P2P apps and mobile remote deposit capture which are reducing the reliance on paper payments, but cash and checks are instilled in consumers’ payment mix and will be here for years to come.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

Read the full story here

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    AI Is Turning Accounts Receivable Into a Strategic Powerhouse

    AI Is Turning Accounts Receivable Into a Strategic Powerhouse

    July 15, 2025
    Embedded Finance

    Embedded Finance: Bringing Payments Under a Single Umbrella

    July 14, 2025
    Making Real-Time Payments a Reality

    Fulfilling the Promise: Making Real-Time Payments a Reality

    July 10, 2025
    mortgage

    The Rich Benefits of In-House Payment Systems

    July 9, 2025
    digital cards

    Beyond Plastic: Why Digital Cards Are the Future

    July 8, 2025
    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    July 7, 2025
    Rewire Acquires Imagen, Looking at Prepaid Cards for Migrant Workers

    Smells Like Team Spirit: What Makes Cobranded Credit Cards Work

    July 3, 2025
    uk banking outages

    New Continuous Strategies for Battling Account Takeovers

    July 2, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result