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TD Ameritrade taps Apple Pay for instant fund transfers to accounts

By Stephen Nellis (Reuters) - Brokerage firm TD Ameritrade Holding Corp is tapping Apple Inc to help solve a problem that has lingered for decades: how to get money into a brokerage account and make it available to trade with on the same day. The Omaha, Nebraska-based financial firm said on Tuesday it was allowing customers to fund their accounts with a debit card in their Apple Pay digital wallets. Using the wallet and a system called Apple Business Chat, TD Ameritrade customers with Apple devices can transfer up to $10,000 a day to their accounts and have access to it immediately, a feature the brokerage says is a first in its industry. Apple confirmed the arrangement. Previously, customers had to either use a wire transfer, which can be complex, or wait for several days before being able to access transferred funds. Sunayna Tuteja, head of strategic partnerships and emerging technologies at TD Ameritrade, said the wait was one of the top-five drivers of customer service calls. "When a customer wants to put money into a TD Ameritrade account, we gave them the same choices they had in the 1970s and 1980s," she said. "We knew it was a persistent client irritant." The key, Tuteja said, was accepting debit cards to handle funding the accounts. Many consumer transfers still happen over the so-called Automated Clearing House, or ACH, system, which traditionally took several days to clear. While the group that oversees the ACH system has worked to speed it up, debit card infrastructure in the U.S. provides nearly instant payments and is widely used. But TD Ameritrade had not been sure debit cards complied with all the legal rules around funding brokerage accounts. "There was a myth that we could never do this because cards are a no-no," Tuteja said. The firm's regulatory experts "locked themselves in a room for two or three days and read through every regulatory document to see what is doable, and the only real no-no is credit cards." Tuteja said TD Ameritrade chose Apple Pay to start with because of its ease of use, security and the fact that about three-quarters of the brokerage's clients use the iOS operating system. In the future, the brokerage hopes to extend the system to other digital wallets, such as those offered by Alphabet Inc's Google or Tencent Holdings Ltd's WeChat. "All the regulatory work we did, and all of the back-end work, all of that is built in a way we can extend it," she said. (Reporting by Stephen Nellis in San Francisco; Editing by Lisa Shumaker)

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