When it comes to sending person-to-person payments, PayPal is in the lead. Many people rely on PayPal to send money to friends and family. However, the process can be complicated, since you have to log in to your PayPal account, then, authorize PayPal to pull money from your bank account to your PayPal account. Then, you send the money to the recipient — who has to log in to PayPal, and then transfer the money to his or her bank account. The whole process can take a week or more to complete.
Some banks, though, are beginning to look for other ways to provide person-to-person payment, since demand is growing. Bank of America, JPMorgan Chase and Wells Fargo are putting together clearXchange, a system that would allow you to send money from your account to someone else, simply by entering that persons name, phone number or email address. Fees will be up to the banks, though, so if a participating bank charges a fee, you will have to weigh that against the fee that PayPal charges.
For now, clearXchange is in a testing phase. When the service rolls out nationally, you will only be able to send and receive person-to-person payments if you and the recipient have accounts at participating banks. Which means you are somewhat limited unless more than three of the big banks join in.
Other Person-to-Person Payments
There are other P2P payment systems out there already. These systems include Popmoney, which works by having you send money with the help of a phone number or email address. However, you either have to have bank participation in Popmoney, or you have to have a Popmoney account. Popmoney charges flat fees, depending on how fast you want the money sent. So, if you are sending a large amount of money, you can save over using PayPal.
Visa will be rolling out person-to-person payment options as part of its digital wallet, expected to be released in the fall. This digital wallet will offer you the chance to use your phone to make payments in a variety of ways, eliminating the need for you to carry credit and debit cards with you. (Google is rolling out its Wallet this summer, but you will need to have a Citibank-issued MasterCard with PayPass to take advantage of using your phone as a credit card. There isn’t a P2P component — yet.)
It appears that plenty of new ways to pay are on the way, making use of digital technology to make sending and receiving money more convenient.