Digital wallets and P2P payments are fast becoming table stakes for banking providers that want to remain relevant with today’s digital consumers. But which one should your financial institution offer?
Multiple studies conclude younger generations know about mobile payments, but don’t care much about them — a service such as Venmo being the rare exception. After watching Venmo dominate the mobile peer-to-peer (P2P) payment transfer market for the past few years, banks decided to do something about it, and Zelle was born. Banks have invested heavily in perfecting the technology and promoting the service, but consumer awareness and adoption continue to lag.
Members of the bank consortium that runs Zelle — including JPMorgan Chase, Wells Fargo, and Bank of America — are spending millions of dollars on ads to attract their existing customers to the mobile payment app.
People are often under the impression that all payment transfers happen instantly, but it’s important to realize that many times they do not. Each major mobile payment app has its own advantages and limitations. Most payment apps use a digital wallet method of transfer, meaning when you send money, it delivers the payment to a digital wallet, after which the recipient transfers the money from the wallet into his personal account. You can think of the wallet as a virtual escrow account.
The following is a brief comparison of the mobile payment services available today.
Zelle is peer-to-peer payment system targeting mobile majority as an alternative to cash and checks..
- Payment transactions occur within minutes, which is faster than other apps, like Venmo.
- Online banking customers who have accounts at participating banks can send money to anyone
Venmo is peer-to-peer payment system most popular amongst Millennials.
- Transactions take days to process.
- Anyone can use the app after setting up an account.
- You only need someone’s email address or cellphone number to send money.
So which mobile payment method is the right one for your financial institution? Which one will resonate with your audience best? The market is competitive, and each offering carries its own unique features and benefits. Whatever your priorities, there’s a mobile payment option out there for you.
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