Fifth Third Bancorp later this year plans to launch CashEdge Inc.’s Popmoney electronic-payment service, which enables consumers to transfer funds to another person’s bank account through the automated clearinghouse system, the companies announced Jan. 5.
Fifth Third plans to position the product as a way for its customers to address different financial situations, such as collecting funds for a youth league, or as a potential option to pay rent, Larry McClanahan, Fifth Third vice president and director of alternative delivery, tells PaymentsSource.
Ron Shevlin, a senior analyst with the Boston-based research firm Aite Group LLC, believes other banks also could use that marketing approach to help build consumer demand for person-to-person payment systems.
“I don’t necessarily think [CashEdge’s agreements] are a response from consumer demand just yet,” Shevlin says. The marketing for such products “needs to be very specific around the use case,” he says.
Fifth Third expects a “fairly good number” of its customers to use the service when it launches in middle of the year, McClanahan says.
Smartphone users will help drive use of such a product, Shevlin believes. “For certain smartphone users, they get the phone and really want to use it and make it integral part” of their daily lives, he says.
CashEdge’s service does work with downloadable mobile applications, but Fifth Third does not offer one. Its customers instead would access the service either online using a personal computer or through a mobile phone’s browser.
Senders would transfer funds using a recipient’s e-mail address, mobile number or bank account information.
If the sender does not know the recipient’s bank account number, CashEdge will send a text message or e-mail with instructions on how to receive the funds. If the recipient is a customer of a CashEdge bank client, the recipient can go to their online banking site to complete the transfer. Otherwise the recipient is sent to a CashEdge-run website and enters their bank information to complete the transfer.
In general, consumer adoption of the service is “way ahead of where we thought we’d be in terms of consumer use,” says Neil Platt, CashEdge senior vice president and general manager of U.S. banking. PNC Financial Services Group Inc. and First Hawaiian Bank were among the first Popmoney clients.
Platt admits most banks have yet to fully promote the product. Like McClanahan and Shevlin, he agrees the banks and CashEdge should advertise the service as an integral financial tool.
CashEdge recently added gift cards as an option to transfer funds (
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