Payments

UK banks are trying out location-based P2P payments

  • U.K. challenger banks are rolling out location-based P2P payment services to enhance relationships with customers
  • Location-based P2P payments still face user adoption hurdles in the U.S.
UK banks are trying out location-based P2P payments

U.K. challenger banks like Revolut are increasingly interested in location-based P2P payments, but their U.S. counterparts aren’t quite ready to embrace them.

On Friday, Revolut introduced a feature called “Near Me” which lets its customers find other Revolut customers using the same feature and send them money without knowing their contact details. On Monday, Monzo rolled out a capability called “Nearby Friends.”

But the most popular payments companies in the U.S. haven’t publicly mentioned plans to introduce a similar service. Zelle declined to comment for this story, and PayPal did not respond to requests for comment. The use cases for location-based peer-to-peer payments among consumers may not be compelling enough for providers to consider it, said Paygility Advisors partner Deborah Baxley.

“It’s clever, but most people who are trying to pay each other aren’t necessarily near each other, and there’s a lot of competition — everybody and their mother is putting P2P on their platform like Facebook, Alipay and Gmail.”

Companies rolling out the feature tout the security and convenience as key drivers for adoption. Monzo iOS platform lead Andy Smart said its users are protected by tokenization; when the user opens Nearby Friends, Monzo generates a token representing the user through its API, which is then sent to Google Nearby through Bluetooth on the user’s device to “broadcast” it to other Monzo apps within a 90-foot radius.

The limited use case of having to pay someone nearby may work in circumstances where a group of people need to pay each other but don’t necessarily want to share contact information to enable Zelle or Venmo. Another use case, adds Aite senior analyst Talie Baker, is consumer-to-business transactions — a capability that Revolut said it’s exploring. An important determinant of U.S payment providers’ openness to features like location-based peer-to-peer payments is catching up with the user adoption curve.

It could have a place in the U.S. market, but the use cases are still pretty narrow and vendors still aren’t yet convinced it will positively affect their bottom line, analysts said.

U.K. challenger banks see the feature as a driver of mobile banking app usage, but companies like Zelle and PayPal don’t share that motivation yet, especially since cash is still the most popular method for paying people in the U.S. compared to online or mobile payment services, according to recent research by Aite group.

“Whether offered by the major players like Venmo or Zelle or smaller entrants, for vendors the key question is how to use the capability to bring a product to market that will allow them to grow market share in an increasingly crowded landscape,” said Vinay Prabhakar, senior director of market strategy and payments at Finastra.

 

Payments

Hitting $1 billion in payments, HoneyBook wants to be the ‘Intuit of the WeWork Generation’

  • Honeybook is a popular financial management platform for solopreneurs and freelancers.
  • The company's payments are growing and it's branching out into financial products with Citi.
Zack Miller | March 22, 2019
Modern Marketing, Payments, Podcasts

Zelle’s Melissa Lowry: ‘Beyond awareness, we’re trying to show how we make everyday better’

  • Bank p2p payment app Zelle is trying to show people how it can be used more broadly.
  • VP of marketing and branding, Melissa Lowry shares what's behind the creative campaign.
Zack Miller | March 21, 2019
Payments

Amazon Pay just got a boost: Worldpay is first acquirer to enable Amazon Pay

  • Worldpay is the first acquirer to enable Amazon Pay.
  • Worldpay does a lot of work in ecommerce, potentially giving Amazon Pay a lot more visibility.
Tearsheet Editors | March 20, 2019
Payments, Podcasts

Citi’s Mary Hines: ‘With digital features, people redeem points more than five times a year’

  • Loyalty programs are evolving along with digital channels.
  • Citi's Mary Hines joins us on the podcast to talk about optimizing engagement.
Zack Miller | March 13, 2019
Online lenders, Payments

Affirm lands the granddaddy of retail partners, Walmart

  • Walmart has partnered with fintech lender Affirm to provide point of sale financing.
  • Consumers can choose to pay later using Affirm.
Michael Deleon | February 27, 2019
More Articles