Can you send me twenty bucks?
At Mission Fed, we are always monitoring the current digital landscape for new technologies that could potentially benefit our members. With the evolution of online and mobile banking, there are several new technologies available to make your member experience easier. As we watch these trends, none stands out more than the quick rise of person-to-person payment services. We offer Popmoney, a popular person-to-person (P2P) service located in the Bill Pay section of our mobile app and in Online Banking. Requesting and sending money through a cash app is easy, convenient, and secured. Now you can send or receive real-time payments straight from your smart phones or computers. As digital technology evolves, so does the opportunity to offer more of these convenient and secure services to our members.
While millennials currently lead the charge, the use of P2P payments has increased in popularity for everyone. The most popular P2P payment platform, Venmo, has become as popular a term as Google, with users “Venmoing” payments to each other. It is speculated that this form of payment will someday overtake cash and checks as the primary way individuals send or receive money to each other. While Venmo is the most popular P2P provider at this time, there are several new players in the market all striving to duplicate or improve on Venmo's success.
What are P2P payment services and what do they do? Simply put P2P is an online platform that allows customers to transfer funds from their individual bank account or credit card to another individual's account online from your computer or any device with internet access. The applications used to manage the transactions are the P2P providers such as Venmo, Popmoney and Zelle.
Venmo vs. Popmoney vs. Zelle: What’s the Difference?
The number of mobile P2P payments is growing rapidly; in 2016, the amount of P2P payments was $147 billion and is expected to reach $316 billion by 2020, according to The Aite Group. Smartphones continue to become the primary P2P channel with more than half of all U.S. mobile device owners predicted to use mobile P2P for sending money; so it is no surprise that so many financial institutions and two of the social media giants, Facebook and Snapchat, have embraced P2P payments.
Venmo, the most popular of these systems, has established itself as the industry leader with 197 million active accounts. What sets this cash app apart is its clean and simple-to-use app design, which allows users to see what payments they have paid and received, right from their screens. Since its acquisition by Paypal in 2013, Venmo continues to see an increase in users and popularity.
Popmoney, similar to Venmo and almost equal in popularity, allows users to make transactions directly from bank account to bank account, and can also be used to request and send money to a friend, regardless of whether or not you both have the app. With our P2P payment service, you can send or receive money the easy way at any time—and pay back your concert buddy for the best show in town. Since Popmoney is part of Mission Fed’s Online Bill Pay, all you need is the person's email address or mobile phone number. Regardless of where the person banks, the money goes directly from your bank account into your friend's account, usually in one business day.
Zelle, formerly ClearXchange, is a new P2P payment service that rolled out this month to over 86 million mobile U.S. banking customers leveraging its existing platform, which includes the largest number of member banks of any other P2P system. As a result, it offers a faster form of digital payments compared with apps like PayPal, Venmo, Square Cash, and others. Instead of transactions taking place overnight or after a couple of days, Zelle can move funds from one bank to another in a matter of minutes. Users can also deposit a check and have the funds available immediately.
Other Popular Services to Send and Receive Money
Dwolla charges a flat fee of $0.25 to the receiver of any transaction greater than $10, but unlike its competitors, Dwolla seems to make signing up for an account far more complicated.
With Google Wallet, you can send money to any email address, and it is free to send money from your account balance or from a bank account, but there is a 2.9% fee to send money from a debit card or credit card.
Not to be outdone, Apple announced its own P2P service within iMessage. With 700 million iPhones to date, Apple has quite the captive audience and with this announcement, the company has the potential to convert a significant number of loyalists from other providers.
As you can see, this market is growing and changing at an incredible rate, but there are players that are quickly rising to the surface. As we review opportunities with some of these providers, we hope to provide more P2P options to our members in the near future.
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. Mission Federal Credit Union disclaims any liability for decisions you make based on the information provided. References to any specific commercial products, processes, or services, or the use of any trade, firm, or corporation name in this article by Mission Federal Credit Union is for the information and convenience of its readers and does not constitute endorsement, control or warranty by Mission Federal Credit Union.
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