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Looks like banks are competing with Paypal now

by marciayudkin
15 replies
In one day, I heard about two services offered by two different banks for sending Paypal-like payments.

I have a bank as a copywriting client and they mentioned, as one of their services, ZashPay, which functions like Paypal in sending money from one person's bank account to another person. Then a couple of hours later I heard on the radio that AllyBank is offering something called Popmoney, which does the same thing.

From what I can tell, if you're the one wanting to initiate the payment, your bank has to be signed up with one of the services before you can use it. And I didn't get a clear sense of what kind of fees are involved.

But I'm guessing that these services will spread quickly among banks, and they may spread to the business functions that many of us use Paypal for as well.

Anyone been following this trend that has more information or insight on it?

Marcia Yudkin
#banks #competing #paypal
  • Profile picture of the author blillard
    Yeah I noticed when I was opening up my business account that my agent was trying to sell me on merchant account they offer it looked interesting but I'm fine with paypal still. I can see how banks would want to would to get into the industry as there is need for them since there are a lot of people who still can't use paypal to collect payments.
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  • Profile picture of the author Mercusio
    My bank, U.S. Bank, is starting something similar at the beginning of the year. Supposedly I can send money to any VISA debit card there is. Just type in the 16 digit number, and the address of its owner and poof! I think they can even generate a 16 digit number that isn't your real number, but just a temporary linked one for single transactions. $2.25 on each $100.00 sent. Supposedly instant too, or next day at least.

    Just recently I can now take a picture of a check with my iPhone and they'll cash it. I remember the days when Kroger used to take almost two weeks to "clear" a check. Remember clearing a check?

    Crazy stuff!
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  • Profile picture of the author Alexa Smith
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    Originally Posted by marciayudkin View Post

    Anyone been following this trend that has more information or insight on it?
    Not here ... I have less information and insight about it than you have.

    But I have certainly noticed that it's a trend, and I'm expecting much more of it, and I welcome it, and will be interested to see what others have to say about it.
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  • Profile picture of the author Robert Kenny
    Banned
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    • Profile picture of the author Jon Patrick
      This sounds great. The more options we have, the better, particularly if they provide suitable alternatives to Paypal.
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      • Profile picture of the author JohnMcCabe
        Now that you mention it, I have seen an ad for a local bank rolling out this service. I didn't pay much attention because I thought it just the latest in a long string of "if you don't use XYZ model smart phone, you're a loser" ads.

        Banks are scrambling for ways to make up for the revenue they lost when the last credit card bill went into effect.

        I'll be watching with more interest now...
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        • Profile picture of the author jideofor
          Ah ha. . . There it is. I thought someone said in a thread here a few months ago that paypal can not be displaced.

          And at that time, I said PAYPAL CAN BE DISPLACED. I wonder what will happen now that banks in America are taking this initiative.

          I pray it spreads fast,which I believe it would. I hope they can spread this around the world.

          Like I said in that thread, I want to see paypal go down on its kneel. I want to see them shivering.
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  • Profile picture of the author ShawnSells
    Pretty much any competition is good competition. Paypal is so well-established though, I think any move by banks to do this will still be limited in it's reach. They would have to design it as more of merchant service to benefit most marketers. Would they do that and cut into their own bank merchant services?
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    • Profile picture of the author JohnMcCabe
      Originally Posted by ShawnSells View Post

      Pretty much any competition is good competition. Paypal is so well-established though, I think any move by banks to do this will still be limited in it's reach. They would have to design it as more of merchant service to benefit most marketers. Would they do that and cut into their own bank merchant services?
      It could run as a kind of tiered service, where those who qualify for traditional merchant services still benefit from opting for those, while adding a layer of secondary merchants who don't qualify for full merchant services.
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  • Profile picture of the author Online Bliss
    Just recently I can now take a picture of a check with my iPhone and they'll cash it. I remember the days when Kroger used to take almost two weeks to "clear" a check.
    Yeah I can use my scanner to make check deposits in my
    Business Account with US. Bank.
    I seriously need to go outside and get some exercise. LOL
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  • Profile picture of the author Marian Berghes
    There's another one called clearXchange from BofA, JPMorgan and Wells Fargo...tho we still need more details, and atm it only seems to be US banks that are taking such a big initiative on stuff like this.
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  • Profile picture of the author tpw
    Here is one started by a former Visa Inc. employee:
    Noca - Payments Simplified

    It was started in 2009.
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    • Profile picture of the author Why9999
      This is an inevitable trend. Paypal is about 5 billion dollars in revenue last year that could have been easily collected by the banking industry instead. However, short-sighted greed has kept them out of this market.

      I don't know about your bank, but mine still wants to charge $7 to wire money bank to bank. That's assinine. That's a late 1980's price.

      But the banks will wise up. And here the GREAT news: the only way PayPal will back off the banks is to drop their fees.

      And that's good news for all of us small guys...
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  • Profile picture of the author Fraggler
    Westpac in Australia has a similar product as well. www.payway.com.au

    It comes with an API but the current integration PayPal has with some specific software we use makes it a pain to change.
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    • Profile picture of the author tpw
      Originally Posted by Fraggler View Post

      Westpac in Australia has a similar product as well. www.payway.com.au

      It comes with an API but the current integration PayPal has with some specific software we use makes it a pain to change.

      The API availability is what I look for from these folks. Without it, they will be "dead" to me.
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      • Profile picture of the author Michael Shook
        I am not privy to any banking insider interconnections and I can't say that i understand exactly what Paypal's charter is for providing financial services.

        The biggest issue with sending money around the worl or anywhere is the reconciliation at the end of the day. Banks do this through the Federal Reserve in the US and computers have been doing this a long time. that is why the nubmers on checks are still in IBM OCR letters.

        Paypal or any intermediary financial institution needs to have a relationship with a bank, a real bank, so that they can settle up through the Fed in th eUS and other banking institutions. Paypal's relationship is through GE Capital (I am pretty sure on this) and they are one of the biggest corporations in the world.

        Chase may be able to compete with them or perhaps Credit Suisse, but that is about it.

        Without a banking relationship that is smooth, any other method of taking payments is going to go away quickly, and it is in GE's best interest to make sure that as may hurdles get placed in th eway of anyone trying to take over a part of this semi-monopoly that Paypal now has.

        The biggest thing about a financial relationship is the ability of you as a seller to get your money without paying too much for it. Any other idea that comes along is going to have to do that as well as PP does, and they have been doing it a while.
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