The buzz around person-to-person payments has long been claimed by rival upstarts such as PayPal Inc., but banks are striking back, as evidenced by the ClearXChange consortium.
For Spencer Jones, it is more than a welcome development. “I think that banks need to be innovating in P2P,” said Jones, senior vice president and head of North American Money Movement for TD Bank, adding banks have an inherent advantage in customer relationships that makes competing in mobile P2P a natural fit.
Jones, who worked on developing mobile payments products for Bank of America Corp., one of ClearXChange’s participants, before moving to TD Bank, also said the decline in modes such as check and cash in favor of P2P is inevitable, making it the right time for banks to aggressively pursue mobile P2P platforms.
But he also says the use case is more complex than the “split the check” example that for years has been cited as the impetus for consumer adoption. Instead, he says small wire payments are more common.
Neil Platt, and senior vice president at CashEdge, which offers automated transfer services to banks on a white label basis, says the most common uses of P2P transfers are for intra-family, household payments and gifts-usually in amounts of about $300 to $350.
These uses reveal banks should position mobile P2P as a replacement for checks as opposed to cash, and target slightly higher amounts than micropayments.
Jones and Emmett Higdon, a principal at Prizm Strategy, also advocated easy execution as a marketing strategy, such as providing simple web navigation, or the use of an alias such as an email address or mobile phone number to complete transactions.
As examples, Higdon cited BBVA Compass, whose Fiserv-powered service aligns mobile P2P with bill pay, simplifying the experience for consumers. He also says ING’s homegrown service executes transactions on one screen.
“Consumers don’t want to set up another account to access their money,” he says.
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