The life span of apps that allow people to send money to each other depends on various factors, not the least of which is whether a bank or third-party provider threw a clunker in front of consumers with short attention spans.
The essence of a person-to-person app is providing convenience and speed while also serving as a digital replacement for cash. Cash is widely accepted, convenient and fast for consumers but is becoming more expensive for banks.
But creating P-to-P apps has a challenging mix of goals in which many ventures have failed, and no strategy has worked twice.
Wells Fargo and Ebay didn't get far in 2000 with Billpoint, as the concept never made it to the mobile age. But it was launched as an online payment system to compete against PayPal.
Citigroup flirted with the Obopay P-to-P app in tests six years ago but eventually decided to shelve that idea as one that was before its time in terms of encouraging consumers to make payments through their mobile phones.
In the meantime, the list of P-to-P apps that have gone to the graveyard, or at least endured a makeover, continued to grow. But new ones were almost always right around the corner to take their place in trying to catch consumer attention.
Payment service providers and banks alike try to find the right strategy and formula to advance a payment technology that delivers what it promises in terms of helping a consumer.
Most recently, ING bank pulled the plug on its Twyp P-to-P app last month in its home base of the Netherlands but kept it in place in Spain, a market where consumers were more inclined to use the app. The move illustrated that what works in one place may not work in another.
"Innovation means experimenting," said ING spokesman Diederik Heinink. "And experimenting means that sometimes you have to stop an innovation as well."
When market players are open to feedback from app users, it helps determine which way to go with a new technology, Heinink said.
"Users decide what apps are successful and that automatically regulates the numbers of available apps and tools," Heinink added. "Of course, there might be stages of innovations or new developments where offer exceeds demand. Normally a shakeout in situations like these occurs sooner or later."
The P-to-P market is heading for just such a shakeout, considering Early Warning and the major banks behind it are planning to launch the Zelle network for P-to-P payments early next year.
Other providers are adjusting their strategies during the banks' long path to launch Zelle, which was called clearXchange for many years. PayPal's acquisition of Braintree eventually gave the Venmo payment app new life and Square has continued to improve its Square Cash P-to-P offering, giving users more options to move, monitor and transfer money.
Meanwhile, Dwolla has moved away from its initial offering of what was essentially a P-to-P service in a mobile wallet, to concentrate more on bank-based faster payments systems.
Still, the progress of third-party providers has been enough to spur on competitors, including the banks, to try to keep up. It's part of what created Zelle to begin with. But if consumers shrug their shoulders, what's the use?
"Consumer adoption is a critical aspect of launching any payment app, and banks tend to use a variety of research methods before launching an app," said Richard Oglesby, president of AZ Payments Group and a senior analyst at Double Diamond Payments Research. "Competitive movement is very often the most important consideration as most organizations don't want to be perceived as behind their competitors."
After a competing provider has achieved proof of concept, it's much harder to say no to an initiative, Oglesby said. "Initial success in an emerging space tends to spur a flurry of activity as others try to keep up," he added.
But success by a competitor is only one aspect of the app-building strategy. "Each company is as unique as their customer portfolios," Oglesby said. "Me-too offerings are rarely as successful as the initial success stories, so companies have to focus on building something unique and valuable that fits the needs of its own customer base."
In that regard, playing "simple copycat games" is generally a prescription for failure, Oglesby added.
Even though ING had to pull the trigger on its P-to-P app in one market, the bank still considers itself a forward-thinking financial institution when it comes to digital payments.
"We try to be a front-runner in coming up with solutions for our 35 million customers and continuously staying a step ahead with the customer experience," Heinink said. "Technology helps with that, but it is not a goal itself."
Still, ING understands that new technologies allow the bank to react quicker to customer needs and that the development window becomes shorter and cheaper, Heinink added.
"We want to know from the user or customer how the experience with a payment app really is," Heinink said. "Is it really easy and fast, and does it make their lives easier?"
The early stages of innovation depend greatly on customer feedback in testing. After that, the bank looks at consumer adoption of the app and the number of transactions it is funneling into the bank, Heinink said.
"In the case of Twyp in the Netherlands, there was not enough added value for the customer, because they were already finding what they needed in the advanced banking app of ING."