When I pay my barber $20 cash, I don’t ask him if that money will work or where he banks.
When I pay the dogsitter with a $25 check (dogs outrank my head), I don’t ask her where she banks.
But to use this new P2P mobile payments system, clearXchange, I’m going to have to ask those questions.
I realize that between Wells Fargo and Bank of America, you are getting a big piece of America. Maybe bigger than Texas! But creating a mobile payment system that works for just some banks is like a state creating their own currency. But maybe worse, because at least a lot of my transactions (barber, dogsitter) are happening within my state borders.
Are you a WF or BOA customer? Have you tried this? Will you?
Guest blogger Jeb Cashin thinks about banking at Harland Clarke by day… and often at night.
A note from Bob Williams – I’ve known Jeb for about 15 years and we share a common employer. He’s been a colleague, an internal customer, and my direct manager during that time. Many thanks to him for providing this thoughtful and entertaining look at the landscape of payments.
P2P payments are coming. But who is using them?
Just how ready are we for instant P2P payments? It’s all the buzz in the financial world and players are scrambling to get in the space. P2P, or person-to-person, payments have been around for awhile. I started using them with PayPal for some eBay transactions years ago. PayPal has advanced the P2P features over the years. If you haven’t tried their mobile interfaces then it’s worth your time
The original P2P payment
I tried to get some family members using PayPal for P2P payments, but….
When I suggested some family members try PayPal with me for some money exchange you would have thought I was speaking a foreign language. Maybe so, but I didn’t talk about the technology as much as I did the benefits: Instant payment, no cash,uses email address, no fees. Habits are hard to change, and that includes how we make payments to other individuals. At least with those in my circle of relationships it appears they are making P2P payments with cash and check.
Are electronic P2P payments impersonal?
I wonder if wider acceptance is hindered because this type of payment is viewed as impersonal? Giving cash or writing a check forces an interaction. It’s giving something you have. Almost like a personal mark. Sending a P2P payment could be invisible. The recipient just receives an email with notification of receipt.
Or is it a trust issue?
It could also be that people don’t trust the delivery of the electronic delivery of a P2P payment. Cash and checks provide a physical artifact representing the payment. I’ve heard some of the older generation in my family use this argument when talking about electronic bill pay. They like the paper trail it generates. It gives them a feeling of security and trust.
Reality is, we don’t make many P2P payments.
How often do we pay someone versus paying an organization or a business? For me, not much. Even as I think back to college and high school days, I don’t remember large number of money exchanges with friends. Most times people paid their share.
So when I put this in perspective. I think P2P payments are a good option to have for financial transactions. But they are just a small part of a full range of payment options that we’ll all need to conduct our daily transactions.