P2P Payments on the Way

We already have P2P lending, in which you can go online and directly lend money to your peers. But what about P2P payments? Fiserv, a company that offers online billing services to banks, is getting ready to launch just such a feature. Here is what Fiserv has to say about the service in a press release:

Using an e-mail address or mobile phone number, consumers will be able to send money to anyone they know, whether it is to repay a friend for concert tickets or dinner, contribute to a fundraiser, pay team dues, pay allowances or even pay the babysitter.  Payments will be deposited directly into the recipient’s account and confirmation of payment will be sent to the recipient’s e-mail address or mobile number.

Yesterday, I spoke with Steve Shaw, a member of the strategic marketing team for Fiserv. He pointed out that this is a great step in creating more convenience for money transactions:

“Right now, if you owe someone money, you usually have to write a check, or go online through a third party. Once we launch our person to person payment system early next year, though, all you have to do is send the funds. It’s convenient especially for those who already have online banking — they won’t even have to get a new password. They can set everything up from one of the 3,000 financial institutions we are already working with.”

For those who do not belong to an institution that makes use of Fiserv, Shaw says that there will eventually be a roll-out of a consumer site that works similarly to PayPal in making payments. However, unlike PayPal, recipients won’t be charged for receiving funds. “There might be fees for the sender,” Shaw acknowledges, “but that will be up to the banks to decide whether or not to charge senders a convenience fee.”

Shaw also points out that with this bank-centric model, there is no need to give out payment information to third parties, or hold money in other places. Fiserv’s system would be protected by security measures common to the financial services industry, and have the added benefit of not needing paper checks, or to have to wait three to four business days for the money to be deposited. “Funds should be available the next day in most cases,” Shaw says.

BudgetPulse recently rolled out a fundraising option that is similar, but it works through an intermediary, like PayPal or Amazon, and doesn’t offer direct P2P payments.

Image source: Daylife