After years of setbacks related mainly to technology and risk management, the person-to-person payments business is finally taking off for banks.

CashEdge Inc. introduced a P-to-P transfer service Tuesday, and said banks are eager to offer a tool that lets people pay each other electronically.

The announcement came less than a week after MasterCard Inc. rolled out a mobile phone transfer service to its issuers. Also this month, three Canadian telecom providers announced a similar mobile P-to-P payment service, and said all the major banks there are considering offering it to consumers.

"Banks have been interested in this for a long time," Neil Platt, CashEdge's senior vice president and general manager of banking, said in an interview Tuesday. But they "haven't found the right way to implement it."

Marc DeCastro, a research manager at IDC Financial Insights of Framingham, Mass., said P-to-P transfers could help banks win new customers and retain old ones, though it is unclear whether the service would generate much, or any, revenue.

"Banks are saying, 'this isn't just a fad, this is something we need to be prepared for,'" DeCastro said. "Just because it didn't take off the first time around doesn't mean it was a bad idea."

He compared P-to-P transfers to bill-payment services, which took off slowly at first but eventually became a must-have feature.

CashEdge is one of the top providers of account-to-account transfer services, which let people move money between their own accounts at various financial companies. The company's customers include nearly a quarter of the top 100 banking companies, such as Bank of America Corp. and Citigroup Inc.

Platt said CashEdge plans to offer the new POPmoney service initially to existing customers, which he said have been very receptive. "It's a bit of a surprise for me because when we went on the road and started talking to all of our clients, we expected a lot of discussions about 'What's the value proposition? Why should we offer this? Will consumers adopt it?' And honestly, we haven't had many of those," Platt said.

A handful of banks have agreed to offer POPmoney, Platt said. (He would not name them.) Though none of the deals have been finalized, he said he expects some of the banks to introduce the service this year. It is up to the banks whether to charge for this service, Platt said.

CashEdge said it has been testing an earlier version of POPmoney with a regional bank it would not name, and that p-to-p payments have grown to half of that bank's online transfer volume. The earlier version required the sender to know the recipient's bank account number; POPmoney requires only that the sender know the recipient's mobile phone number or e-mail address.

Several banks have tried to launch p-to-p payment services in past years, but many of these early efforts fared poorly. Among the failed experiments were Citigroup Inc.'s c2it service, BankOne Corp.'s eMoneyMail, and Wells Fargo & Co.'s BillPoint Inc., a joint venture with eBay Inc.

BankOne, which has since been acquired by JPMorgan Chase & Co., said its fraud rates were too high to sustain the transfer service.

BillPoint was shut down when eBay bought PayPal Inc. in 2002. Citi shuttered c2it in 2003; observers said the service was scarcely used. (Citi got back into the game last year, launching a P-to-P transfer service using technology from Obopay Inc.)

Bruce Cundiff, a director of payments research and consulting for Javelin Strategy and Research, said that although fraud was a problem with earlier P-to-P systems, many of them "failed because they were very single-bank focused, and you need the network to survive."

CashEdge's system can address this issue, he said. "CashEdge has a lot of large-bank clients and may be able to be the connection — the network creator."

POPmoney lets people initiate transfers by entering a recipient's e-mail address or mobile phone number, either through online banking sites or mobile phones. The recipient gets a text message or e-mail with instructions for accessing the funds.

If recipients' bank also offers POPmoney, they can complete the transaction through their banks' Web sites; if not, CashEdge has created a POPmoney Web site where recipients can tell the company to forward the money to their accounts.

CashEdge, too, has had some misfires in the P-to-P field. It introduced a service in 2002. "At that point our architecture wasn't really built to support it," Platt said. Usage was low, and there were risk issues that CashEdge had to resolve before it could move forward with POPmoney, he said.

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