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. Most banks and credit unions will choose based on mobile preference, cool factor, convenience, and the familiarity (or level of trust) key constituencies will have with a particular platform if the C-suite at your financial institution has heard of Venmo, that may end up being the platform you go with. Whatever your priorities, there’s a mobile payment option out there for you.
The Best Mobile Payment Platform
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. Zelle, which is already installed on bank customers’ phones (part of their mobile apps), is available to 95 million current bank customers versus Venmo’s user base that totals around 3.5 million. However, the Zelle brand” — aka its “cool factor” remains practically non-existent.
A quick review on the basics: a payment app is simply a service that allows consumers to send money to another person (often by email or mobile phone number) via an app, or sometimes a website. This process is commonly referred to as “peer-to-peer” or “person-to-person” money transfer apps, or simply “P2P apps” or “payment apps.”
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.
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.The Zelle app is already a feature within existing bank apps.You only need someone’s email address or cell phone number to send money.
Recipients who don’t bank with Zelle partners can use standalone app to claim their money by downloading the app in Apple Store and Google Play.There are no fees to send, request, or receive money.You can only cancel a payment if the recipient hasn’t enrolled with Zelle, otherwise it goes directly into their bank account.
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.Request or pay other users and add a note or emoji as the transaction description.You can share the transaction via social media if you like.
When you cash out” the money that friends have paid into your Venmo account, it typically takes 1 to 3 business days to receive your funds.There are no fees to send, request, or receive money via bank transfers and debit card.Using a credit card for payment will cost 3 percent per transaction.Know the recipient before sending, as you can’t cancel payments made to wrong users.