9 Different P2P Payments Services in the US

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LTP Research Team

Everyone deserves a faster way to send money to friends, family and others. To settle US domestic payments more quickly, a lot of proposals and initiatives have been floated so far. There are a bunch of solutions that startups and FinTech firms have brought to the market over the last five years.

At this point of time in the US, some companies are already providing P2P payments. They provide low-cost, efficient payment networks so that millions of Americans can move funds quicker. Below are the names of some of the companies that are using cutting-edge technology to provide these payment platforms.

Venmo

P2P mobile payment app Venmo was launched in 2011. After its release, within a few months, payment processing company Braintree purchased it for $26.2 million. In 2013, PayPal acquired Braintree and as a result, acquired Venmo in the process.

Venmo ties a customer’s account to his/her phone number. Venmo to Venmo account transfers happen immediately. The app lets users send payments to one another’s Venmo accounts, which are linked to their bank accounts or a debit card. In March 2015, Venmo had about 1.5 million users. According to a Bloomberg feature, Venmo processed $700 million in payments in the third quarter of 2014, up from $141 million over the same period the year before.

Venmo’s major focus has been millennials, and from a technology standpoint, it has been security. The company has also created multifactor authentication (MFA) for its users.

Paypal

PayPal is a faster, safer way to send money, make an online payment, receive money or set up a merchant account. PayPal to PayPal transfers happen immediately. The company has a worldwide presence and has 100 million active users globally. Powered by PayPal, P2P (“P2P Payments”) is a service that allows users to send money to others via online banking using a mobile number or email address through the PayPal network.

PayPal enjoys a fair market share, and the company is now focusing on under-penetrated areas to increase its reach and customer base.

Dwolla

Dwolla: Dwolla’s digital payment network securely connects with US banks and credit unions to enable safe, fast and account-to-account transfers. The company provides real-time payment solutions within its closed system. So, if two people have Dwolla accounts, they can move money between each other in real time. Dwolla is currently only available in the US. Dwolla users can send money to email addresses, Facebook friends, LinkedIn connections, Twitter followers and small businesses.

Dwolla is competing on price point with other competitors. Other large P2P players charge around 3% of the transaction fees whereas Dwolla’s P2P service costs $0.25¢ per transaction.

Square cash

Square Cash: Square’s mobile payments app is called Square Cash. Square Cash was originally launched using a system that involved sending an email to someone with the dollar amount in the subject line and “Cash@square.com” copied in the message. Square Cash integrated multiple technologies like BLE, wearables and others. Using Bluetooth low energy (BLE) technology, anyone can make a payment from their device by simply tapping the name or photo from a list of those that appear within proximity. The feature works in such a manner that it’s not necessary to know the other person’s contact info. The app uses BLE effectively to signal one’s intent to make a payment to another peer. This makes it easier for mobile payment enthusiasts to pay each other for tickets, restaurant bills and in many other social scenarios.

A major focus for Square Cash has been innovation. After the launch of Square Cash, the company has integrated multiple technologies into the system which has resulted in increasing adoption.

Facebook

Facebook: A vast majority of Facebook’s 500 million monthly users are logged on to Facebook Messenger with about 80 million payment cards on file. Facebook’s P2P payments system is currently built entirely around the Messenger platform. Facebook’s P2P payments begin as a conversation within the Messenger app. Then, with the press of the new “$” icon and the entry of an amount, one can send money that will arrive on the recipient’s listed debit card within seconds.

The major focus of Facebook is to increase the awareness of the solution and leverage the strong user base it has.

Google wallet

Google Wallet: Gmail-based money transfer allows users to send money to Google Wallet accounts easily via email messages. People can quickly and securely send money to friends and family directly within Gmail even if the recipient doesn’t have a Gmail address. Sending and receiving money in Gmail is free and easy. To send money in Gmail, hover over the attachment paperclip, click the “£” icon to attach money to your message, enter the amount you wish to send and press “send.”

Person-to-Person transfers are free in the US using a debit card with Google Wallet. The company will further increase its reach with the launch of Android Pay, where P2P payments would surely be a feature.

Oink

Oink: Virtual Piggy is the provider of Oink, a secure online and in-store youth wallet. Oink allows teenagers to manage and spend money within parental controls while gaining valuable financial management skills. The California-based company developed Oink in 2014.

A major focus of Oink is to provide low-cost P2P solution to teens so that they can receive deposits in their accounts for work or gifts from family and friends.

Cheddar up

Cheddar Up: Cheddar Up, a Denver-based company has created an online platform allowing users to collect and track online payments from a group. In October 2012, Founders Molly DiCarlo and Nichole Montoya initially started working on the company to specifically help schools and moms handling such group transactions. They launched the company a year later. The two have raised money from three investors in two rounds, including $725K this April.

The company provides a gamut of features like payer tracking, automatic reminders, no collector fees, custom form fields and payment in three clicks.

Let’s also have a quick look at B2B play

Popmoney is a classic example of a product that banks can use.

Popmoney

Popmoney: Popmoney transfers money directly from bank account to bank account, and can also be used to request and send money to any phone number or email address, regardless of whether users at both ends of the transaction have the app or not.

Popmoney by Fiserv largely focuses on banks and helps them to get into P2P payments.

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