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

the first hit is free

[turkeydance]

back in the day....the banks PAID you to try their ATM.

Amazing they took this long

[DeplorableCodeMonkey]

I can't believe it never occurred to a lot of executives in the commercial banking sector to do this. It would be a great way to make PayPal-like income without having to go through the credit card process. If they set up a system where you could define like 5 people where no fees would apply for personal transactions, it would be a hit with families.

Re:Amazing they took this long

[whoever57]

The US banking sector is way behind what is available in most European countries.

For years, people in the UK have been able to make payments direct (and near instantaneous) to another bank account with no fees.

The simple fact is that all the alternative payment methods involve costs that the banks must absorb. A simple and highly automated, customer-driven payments system reduces the banks' costs. This type of system is a win for banks even if there are no fees involved.

Re:Amazing they took this long

[houghi]

I live in Belgium. Payments to other people is the same day (I think by law). However if you do it to a company it takes 3 days, (2 if with the same bank)

Why two days to a company? Here is the answer as far as I know:
When the Euro came, the politicians wanted to simplify banking around Europe, so they introduced, among other things, the IBAN number. This is your bank account and to that everybody can send money to everywhere.

They first did the personal accounts and that was put into law and now that happens really fast and cheap. They where working on the same things for company accounts, but then some idiots flew a plane into a building. Now the Americans wanted to see what money was transefered and that resulted in a delay. Obviously the banks do not want to rush things and want to keep that money to work with.

All in all, besides the delay and the fact that the US knows where money goes to, it all works great.

My parents lived in Spain and when my mom died, we brought my dad to Germany with a Dutch abulance service. Money was transferd during these fays between Germany, Belgiun Spain and The Netherlands without an issue as if they would have been at the same bank.
My dads pension, from several different companies in different countries he lives in arrive like clockwork. All we needed to do was send proof of the new bank account and that was it.

This has been the case since several years now. In fact so luch that I am looking to put my savings in another country. With online banking the need of having it in your own country is less needed and the interest cab be a little bit higher. Laws are almost identical all over the place and banks work in multiple countries anyway.

On a sidenote: when I first started with Internet Banking, the bank asked me to pay them 1000BEF (40EUR) per year for the pleasure of needing less staff and have things done automatically. So I changed to a bank (Citibank then) that did it for free. I am not rich enough that the possible difference in interest would have a huge impact on me.
Other side note: A friend many years ago wrote a checque when he took out money at the bank. To the banks he told it was easier for him to do his administration. The real reason was that they where not allowed to charge anything and it costed them a shitload of money.

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.

Name the 5 least Trustworty Banks in the USA

[Templer421]

That would be......JP Morgan, Bank of America Corp, Wells Fargo, U.S. Bancorp and Capital One.

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.

Re: what is the fee for this?

[ArmoredDragon]

Only way this wins over venmo is if:

- Transfers between bank accounts happen truly instantly, i.e. no ACH waiting, and completes within one minute. This is 2017 god dammit.
- No need for it to "clear" on the other end. If the sender's funds aren't available, then they just can't fucking send it. So this means no possibility of scamming in a manner similar to check kiting.
- A process available to get money back if it's a scammer (i.e. make western union or moneygram style fraud impossible.)