Launch of Square Cash Cues Banks and Credit Unions to Step up Their P2P Game
Last week, Square joined the ranks of companies offering person-to-person (P2P) payment services for consumers with the official launch of Square Cash. The service touts a simple user experience – and rightly so. To transfer funds with Square Cash, the user sends an email to their intended payee, with email@example.com in the cc: field and the payment amount in the subject line. Once sent, both the sender and receiver receive emails from Square, and they must then enter their MasterCard or Visa debit card details to complete the transaction.
2,000 financial institutions that offer the Popmoney personal payment service have exactly what consumers want, and this is the right time to tell them.
Certain segments of consumers will embrace a service like Square Cash. However, our research continues to show that, if given a choice, consumers prefer to make payments from their bank or credit union. Our most recent data indicates that 79 percent of U.S. consumers would be open to using a digital P2P service through their financial institution. Consumers trust banks and credit unions to manage their money and keep their personal information secure. And, using a P2P service they can access directly from their online or mobile banking account allows them to check their account balance before sending a payment, and maintain a centralized view of money coming and going from their account.
The fact is that high-profile entrants like Square raise the awareness of P2P payments as a category, as I noted in a previous blog about Google's entry into this space. Electronic payments remain a fraction of the 16 billion P2P payments that are made each year. So, increasing the number of people who are aware of this as an option is ultimately a good thing.
This doesn't mean that banks and credit unions should stand idly by, waiting for a rising tide to lift all boats. The more than 2,000 financial institutions that offer the Popmoney personal payment service have exactly what consumers want, and this is the right time to tell them.
We must continue to focus on marketing and raising awareness of the distinct benefits of P2P payments through a financial institution. The majority of consumers have not yet adopted P2P, so the race is just getting started. Awareness, convenience, usability and security are all considerations that will factor into consumers' decisions about which service they ultimately use. Financial institutions are uniquely positioned to serve as a payments hub for each of their customers, and it's up to us to let them know.