US Banks Launching Answer To Peer-To-Peer Payment App Venmo (reuters.com)

The U.S. banking industry is about to launch its answer to the popular mobile payments app Venmo. "Over the next week, five of the largest U.S. banks will light up their segments of a new payments network called Zelle, executives said in interviews," reports Reuters. "They plan to announce details of the launch on Monday, and expect another two dozen banks and credit unions to join over the next year." From the report: The long-awaited network will allow tens of millions of bank customers to send money to each other instantly - known as person-to-person payments - with a few taps on their smartphones. That is an improvement over Venmo, which immediately alerts users that a money transfer is in progress, but takes time to shift funds between bank accounts. Customers who use existing bank payment apps may not notice much of a change beyond marketing. Transfers will simply happen faster because the banks are finally linking to each other, executives said. JPMorgan, Bank of America Corp, Wells Fargo & Co, U.S. Bancorp and Capital One Financial Corp will be the first to plug into Zelle.

Comments

Re:what is the fee for this?

[Tony Isaac]

They may never be able to charge for this, just like they've never been able to charge monthly account fees for checking accounts. But like checking accounts, they probably will attach strings to the service, like, you have to have a recurring direct deposit every month.

The main reason they can't ever charge outright is competition. There will always be another bank that will make it free.

What is the catch with Venmo?

[sanf780]

I am reading the legal piece on the Venmo website. Venmo is owned by Paypal. They have a 3% fee that is usually waived except for when funds originate from a credit card. Venmo may limit how much money you can send and receive. They can investigate any transaction and cancel it at Venmo discretion. If the recipient does not create an account and/or receives the transfer, your money may be held up to 30 days. Venmo can take money from your bank account. In the reverse situation, Venmo does not automatically send the money to your account - this is a separate action you need to take. If you have a business account, there is a limit on how much money you can withdraw but there is no such limit on the money you may receive.

On the privacy side of things, they get your Facebook credentials and the accounts you relate to in Facebook (let me not call them "friends"). They may use the information to promote other products to you. And you may publish all of your transactions online or just let the people you know know, for whatever reason you can think of.

So far, I only see the 3% fee on credit cards. The held funds do not "typically" give the Company any interests, although they have the right to do so. I might have missed something on the privacy side of things. Is what I listed all the revenue that Venmo gets? Seems somewhat low.