Tag: P2P payments

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How Apple Pay Cash Stacks Up Against Venmo

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As part of an early release of its updated iOS 11.2 mobile operating system, Apple is rolling out a P2P payments platform, Apple Pay Cash, available to anyone with an iPhone or Apple tablet, Apple Watch.

Apple Pay Cash already has a lot of competition. The person-to-person (P2P) payments market is fairly saturated with other platforms like Venmo, Paypal, Square Cash, Google Wallet and the like. At the moment, Apple’s largest competition in the P2P space is social payment app Venmo, which is owned by yet another competing payments processor, Paypal. Like competitors Venmo and Paypal, Apple Pay Cash is easy to use with one way we communicate most: via text. But unlike its major competitors, Apple is leveraging its user base to provide a P2P service that comes along with ownership, rather than requiring you to download another application.

Venmo uses emojis and a social feed in an attempt to take the “awkward” out of paying or charging your friends money. The tactic seems to work. Venmo’s user base completed $9 billion in transaction last quarter, about 93% more than the same quarter a year earlier. Since September 2016, the app allowed its users to pay via iMessage and Siri, expanded its online payments business, and tested out a physical debit card with some users. The company is also reportedly, like many other P2P processors, exploring instant deposits, too, to the tune of about $0.25 per transfer.

Apple Pay Cash seems to imitate several of Venmo’s features, so the 68% of millennial mobile payment users who say they use Venmo most seemingly won’t have too much incentive to make a switch to Apple Pay Cash. However, a relatively easy setup with Apple Wallet, may appeal to those outside of the millennial demographic who aren’t already attached to Venmo, but need to send mobile payments, too.

What is Apple Pay Cash?

Apple Pay Cash is Apple’s person-to-person money transfer service. Apple users can use Apple Pay Cash to quickly send and receive money to and from friends, acquaintances and family members using Apple’s built-in messaging app iMessage. The service is available in the U.S. on iPhone SE, iPhone 6 and later, Apple Watch, iPad Pro, iPad 5th Generation, iPad Air 2 and iPad mini 3 or later. You can also ask Apple’s intelligent personal assistant, Siri, to pay someone via Apple Pay Cash.

Source: Apple

How does Apple Pay Cash Work?

You can say, “Hey Siri, send $[an amount of money] to [one of your contacts]” to prompt a message asking them which app you want to use to send the funds, including Venmo. You can also send money via iMessage by tapping the app store icon and selecting Apple Pay at the bottom.

The money you send will come from one of two sources in the Apple Wallet application: The digital Apple Pay Cash Card or any linked debit or credit cards in your Apple Wallet. The transaction is free if you pay someone using a debit card. If you use a credit card to pay another person, you’ll be charged a 3% fee. Payments are approved using a finger with Touch ID or a smile with Face ID if you have an iPhone X.

When you get paid, the money you receive is automatically credited to a digital Apple Pay Cash Card that lives in Apple Wallet, for use right away. Unlike Square Cash, you don’t get a physical card to use, but the digital Apple Pay Cash Card, like a gift card, can be used like any other debit or credit card in the Apple Wallet. You also have the option of transferring the funds on your Apple Pay Cash Card to a bank account, but that may take up to three business days.

When not using Apple Pay Cash to pay a roommate your share of the light bill or charge a friend for his share of the a group vacation, you can use the digital Apple Pay Cash Card — or another card in your Apple Pay account — at any of these retailers to pay online or in stores.

How do I get Apple Pay Cash?

To do to gain access to Apple Pay Cash, update your compatible device to iOS 11.2 or watchOS 4.2 and set up the Apple Pay Cash Card in Apple Wallet. Apple Pay Cash is not available on non-Apple devices or for use outside of the United States.

Step 1: Update your Apple device

To update the device, go to Settings, then General, then Software update. An on-screen message will let you know what version of iOS your device is running and prompt you to update if you’re using old software.

Step 2: Set up your Apple Pay Cash card

Once the device is updated, it’s time to set up the Apple Pay Cash card. In Settings, go to Wallet & Apple pay. There you will see the “Add Credit or Debit Card” option or your Apple Pay Cash card. Click on the card to set it up. Hit continue, and agree to the terms and conditions after reading them thoroughly.

Verification

The device may or may not prompt you to verify your identity when setting up the Apple Pay Cash card, but you should if you want to send or receive more than $500 per transaction.

To verify on iPhone, click the small ‘i’ with a circle around it next to the Apple Pay Cash card in the Apple Wallet app and tap Verify Identity. You will be prompted to enter personal information like your name, Social Security number and date of birth. You may also need to answer questions about your personal history or submit an image of a photo ID like a driver’s license for verification.

You can then load the card with funds using other linked debit or credit cards in Apple Wallet. The Apple Pay Cash card requires a minimum $10 deposit. However, users don’t have to load and Apple Pay Cash card with funds before you can use Apple Pay Cash to send and receive funds. They can use Apple Pay Cash with any of their other linked debit or credit cards in Apple Wallet.

When the two steps are complete, you can then begin using Apple Pay Cash.

Source: Apple

How does Apple Pay Cash stack up to Venmo?

Apple’s main competition in the P2P space is Venmo. Here’s a breakdown of how Apple Pay Cash stacks up to the leading P2P payments platform.

Where Apple Pay Cash beats Venmo

No need to download an app

Apple Pay Cash is built into Apple’s iOS operating system, so you don’t have to download another app that could take up precious phone memory drain your battery life. To use Venmo on the go, you need to download and set up the Venmo app, which can be a tedious hurdle for some.

Easily change between payment options

You can’t easily switch between payment options in iMessage using Venmo like you can with Apple Pay Cash. The only way to switch payment option is using the Venmo app and changing payment options requires going to Settings, then Banks and Cards, then setting one card or bank account for use in payments to peers. After going through multiple screens to complete that process, you can then pay with the selected payment source.

With Apple Pay Cash, you can switch payment options in your Apple Wallet right in the iMessage app, in the middle of making a transaction.

Apple Pay Cash automatically gives you an in-app card

The Apple Pay Cash card is an interesting addition to the P2P space, as it allows you to automatically access to the funds you receive via Apple Pay Cash. The digital card lives in Apple Wallet and can be used like a gift card to make purchases in physical stores or online at retailers who use Apple Pay.

Source: Apple

Transfer limits

Apple Pay Cash lets you send more money per transaction and on a weekly basis than Venmo does. Apple lets you send up to $3,000 in a single transaction and $10,000 in a seven-day period. Venmo has a $2,000 transaction limit and a seven-day limit of $2,999.99. Venmo users can send or receive up to $4,999.99 in a seven-day period and may not complete more than 30 transactions in a 24-hour period.

Where Venmo has the edge over Apple Pay Cash

Venmo has a wider reach

Venmo offers its same P2P service online at Venmo.com, where you can log in and do everything you do on the Venmo app on your desktop or laptop. Apple Pay Cash is exclusively offered on Apple’s mobile devices. Exclusivity may or may not be a downfall for Apple Pay Cash, as exclusive offerings like iMessage and FaceTime have long set Apple apart from its competitors. Those who own Apple Macbooks or desktop devices can pay for items online using their Apple Wallet but aren’t be able to set up Apple Pay Cash without access to an iPhone or iPod touch. Android users and those who don’t have a mobile iOS device, can’t use Apple Pay Cash.

Venmo might give you a physical debit card

Venmo reportedly sent some users invitations to test out a physical Venmo card over the summer months in 2017. Users who opt ed in didn’t pay a fee to use the card, which pulls funds from the user’s Venmo balance. There is no confirmation of a future rollout of physical-card invites to all users.

Send money from a bank account

You cannot use Apple Pay Cash to send money directly from a bank account, like you can using Venmo and practically any other existing P2P platform. Apple Pay Cash does allow you to send money using linked debit cards, however. Arguably, sending money using a debit card is the same thing as sending money from a bank account, as the funds generally come from the same place.

Where Apple Pay Cash and Venmo are the same

Ask Siri to send

When you ask Siri to send money to a contact, the AI doesn’t automatically send the funds using Apple Pay Cash, but, instead, asks you to select from the options you have that can perform the task. Apple Pay is an option, but so is Venmo, if you have that downloaded.

Pay in Messages app

Way ahead of Apple, Venmo released its in-app iMessage integration back in September 2016 (also when Venmo released its Siri integration). Now, you can do the same thing with Apple Pay Cash.

B-to-C payments

In addition to paying friends and family, Apple Pay lets you pay businesses using Apple Pay Cash. You could technically already use Apple Pay where available in stores and online, but now you can use the balance accrued from received payments or loaded onto an Apple Pay Cash card in Apple Wallet. Venmo users can also complete online transactions to businesses using Venmo, a feature Venmo debuted October 2017.

Cost

There is no cost difference between Venmo and Apple Pay Cash. Both systems charge no fee to send money using a debit card and charge a 3% fee to send money using a credit card. Venmo also doesn’t charge for sending money from a linked bank account. Apple pay Cash doesn’t offer the option to link a bank account.

The bottom line

If you are a loyal Apple user and a late adopter to person-to-person payment systems, Apple Pay Cash could act as a kind nudge into the P2P payments space. In addition, Apple Pay Cash’s iMessage integration and quick setup process make it easy for the less-tech-savvy among us to start sending and receiving funds electronically. On top of that, having an Apple Pay Cash card already in our Apple Wallet makes it easy to spend any money you receive at vendors that accept Apple Pay, without having to wait a day or two for the money to show up in your bank account.

If you’re already a Venmo user, other than Apple Pay Cash’s automatic addition into your Apple devices with the iOS 11.2 update, there’s far less incentive to switch over to Apple Pay Cash. If you like to make your P2P payments and requests on a desktop or want to send funds directly from your bank account, stick with Venmo.

Aside from those features, Venmo and Apple Pay Cash cost the same and are about as simple to use. 

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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Banking Apps, Reviews

Zelle Is Big Banks’ Response to Venmo — Here’s How it Stacks Up

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Perhaps you’ve heard of Venmo, a PayPal-owned company that caught like wildfire among millennials and is currently the most popular way for people to split the bill. The digital peer-to peer (P2P) payment service is ubiquitous to the point of being a verb — “Venmo me” — but that’s not stopping the big banks from making a play for the market.

They’re responding with Zelle, a P2P transaction platform that says it can process payments between accounts at different banks within minutes, for free. When using apps like Venmo, PayPal, and Square Cash, consumers may have to wait up to two or three days to access deposits in their bank accounts or pay a fee for instant access.

What is Zelle?

Zelle is a P2P payment service that lets you send money directly to your friends’ and family members’ bank accounts using only an email address or phone number, even if their account is with a different bank. As of this writing, Zelle is only live at nine banks: Bank of America, Capital One, Chase, Fifth/Third Bank, FirstBank, PNC, U.S. Bank, USAA, and Wells Fargo. It lists 25 additional bank as “coming soon” on its website.

Parent company Early Warning says Zelle will reach about 86 million U.S. consumers through its partners’ mobile banking applications. If your bank isn’t partnered with Zelle, you can still create an account using clearXchange, the network that powers Zelle, to send and receive money using email addresses and phone numbers (much like other P2P payment services).

Before Zelle became available through banks’ mobile apps, it was already hard at work establishing itself in the P2P payments space. Early Warning reported in April the Zelle network processed more than 170 million P2P payments in 2016 totaling $55 billion. In the same year, Venmo processed $17.6 billion in payments on its free mobile app, a year-over-year growth of more than 140%.

How Zelle works

Zelle plays up its ease of use: Because it’s integrated into mobile banking apps, customers of banks using Zelle can use a single app to schedule bill pay, make deposits, and complete fee-free P2P transactions. That means there is no extra app to download, unlike stand-alone apps like Venmo and PayPal. (Zelle does, however, plan to release an app.)

Here are some examples of how Zelle has been integrated into mobile banking:

Where to find QuickPay with Zelle. Source: JPMorgan Chase.

 

Zelle payment options in the Bank of America app. Source: Bank of America.

To reach customers whose banks aren’t part of the Zelle network, Early Warning says it partnered with MasterCard and Visa to make a Zelle app that will allow transfers to those at nonparticipating banks and just about everyone with a U.S.-based debit card. Early Warning says they plan to release the app in the coming months.

Where Zelle has an edge on competitors

When you send money to a friend using Venmo, they instantly receive that amount in their Venmo account, but then need to initiate a bank transfer to access the funds. The same goes for PayPal and Square Cash. With Popmoney, a service that sends money directly between bank accounts, there’s no need to initiate a deposit, but it takes a couple of days for the transactions to clear. With these services, it can take one to three days for a deposit to become available in your bank account.

By leveraging its network of bank partnerships, Zelle claims consumers should be able to make transactions between different institutions within minutes. However, if your recipient does not have access to Zelle through their bank or credit union, or their partnered bank does not yet support real-time payments, Zelle loses its advantage. The same is true if you decide to send the money using clearXchange. Transactions would then take between one and three days to complete, no better than the likes of PayPal or Venmo.

Though Zelle touts transaction speed as one of its greatest strengths, its competitors aren’t far behind. Square Cash offers instant access to transferred funds for a fee of 1% of the deposit amount, and in June, PayPal started rolling out instant transfers to PayPal and Venmo users with eligible Visa and MasterCard debit cards. That perk will carry a 25 cent fee per transfer, so for now, Zelle has an edge by offering fee-free speed.

There are dozens of ways you can can send money to friends, family members, or the person you picked up your coffee table from on Craigslist. They range from social media options like Snapcash or Facebook Messenger, to full-fledged mobile and web apps like the PayPal app or Google Wallet. We asked Aite Group’s Banking and Payments industry analyst Talie Baker which big players in the P2P payments space to compare to Zelle. Here’s a breakdown of how they stand up to the financial industry’s P2P processor:

Click an icon below to see how Zelle compares to other payment applications

Feature Zelle Venmo PayPal Square Cash Popmoney Google Wallet Facebook Messenger
Who you can send money to Anyone whose bank offers Zelle (86 million consumers) or anyone who is set up with ClearXchange (25 million registered users) Anyone with a Venmo account (unknown, owned by PayPal) Anyone with a PayPal account (210 million customer accounts) Anyone with a Square account (unknown) Anyone at any of 2,400 financial institutions (70 million consumers) Anyone with a Google account; no need to have a the Wallet app Anyone with a Facebook account who is 18+ years old
Time it takes deposit to become available in recipient’s bank account Minutes, unless the recipient banks with a bank that doesn’t support instant transfers or isn’t a partnered institution 1 to 3 business days after transferring from Venmo account to bank. Instant access coming soon, for a fee of $0.25 per transaction. Up to 4 business days. Instant access coming soon, for a fee of $0.25 per transaction. Up to 2 business days. Instant deposits are available for a fee of 1% of the deposit amount. Up to 2 business days 1 to 3 business days after transferring from Google Wallet to bank Up to 5 business days
Has a stand-alone app No. Zelle is integrated directly into existing bank mobile apps. Yes Yes Yes No. PopMoney is integrated into existing mobile banking apps. Yes Yes
Has a web version Yes Yes Yes Yes Yes Yes Yes
Fees None Free to send money from a bank account or debit card

3% fee to send money from a credit card

Free when you send funds via a bank account

2.9% plus 30 cents (U.S.) of the amount you send using a debit or credit card

Free to send money from a bank account or debit card.

3% fee to send money from a credit card

Free when receiving money

$0.95 to send or request funds

Free Free
Accepts credit card transactions No Yes Yes Yes No No No
Transaction limits None, but your bank may impose transfer limits Send and receive up to $2,999.99 per 7 days after identity verification; receive up to $2,000 per transaction on Venmo. Send and receive up to $10,000 per transaction Send up to $2,500 a week after identity verification; receive more than $1,000 per 30 days after identity verification Daily transaction limit for a debit card: $500

Daily transaction limit for a bank account: $2,000

30-day transaction limit for a debit card: $1000

30-day transaction limit for a bank account: $5,000

Send up to $9,999 per transaction or up to $50,000 in 5 days. If you live in Florida, you can send up to $3,000 every 24 hours. Up to $9,999 within 30 days
Supports international transfers No No Yes – Fees to more than 200 countries vary. No No No No
Lets you store funds on an in-app account No Yes Yes Yes Yes Yes No

Other things you need to know about Zelle

Transfer limits: There are no limits to the amount of money you can receive, but there may be limits on how much money you can send, depending on your bank and the type of account you’re using.

Zelle allows banks to regulate your transaction limits. For example, Chase caps transfers from personal checking accounts at $2,000 per transaction, and customers can send up to $2,000 a day and $16,000 in a calendar month. However, customers sending money from a Chase Private Client or Private Banking client account can sent up to $5,000 per day and $40,000 per calendar month. Check with your bank to see if any limits apply to you before sending large amounts of money.

No credit card transactions: You won’t be able to send money using a credit card at all, even after Zelle rolls out a mobile app, like you can for a 3% fee on Venmo.

No international transfers: As of this writing, Zelle’s system doesn’t support international payments. The service only works with U.S.-based bank accounts, so you won’t be able to send money directly to family abroad. However, if you are traveling and have access to your bank account overseas, you can receive transfers made to your U.S.-based bank account.

The bottom line

If you’re sick of waiting one to three days to access your roommate’s $400 share of the rent, Zelle may be a solution — that is, if you and your roommate both have bank accounts on the Zelle network. And even though Zelle may not have the name recognition of Venmo or PayPal, it offers something they don’t: fee-free instant transactions. A 25 cent fee for instant access to your funds or a 3% fee for using a credit card can add unnecessary costs to using your own money. But if you’re simply looking for a way to pay friends for free, Zelle is an easy-to-use option — just like many other P2P platforms out there.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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