Person-to-person payments have made it easier for consumers to quickly send and receive money, but accessing those digital funds as cash has historically added another step to the process. Square is addressing that limitation by expanding its Square Cash P2P payments offering with ATM access through its physical Cash Card. Giving consumers the ability to withdraw their P2P balances at ATMs could make the service more useful to a broader range of customers, particularly those who still rely on cash for some everyday transactions.
The development also reflects the continuing evolution of P2P payments from a niche service popular with younger consumers into a more mainstream payment method. As providers add capabilities that connect digital balances with traditional payment channels, consumers may become increasingly comfortable treating P2P accounts as another way to manage and access their money.
The article outlines how Square has developed their own P2P product to cater to those that require the ability to easily gain cash access to P2P funds. Person to person (P2P) payment has been an area of interest for financial institutions, fintech providers, mobile device companies, and social networks for some time now. The idea of being able to nearly effortlessly send and request payments to/from peers has been gaining momentum for the past several years. While the early adopters tended to be younger generations, the use of the P2P conduit is expanding to older generations with new offerings. The ability to convert these digital funds to accessible cash has been one area that has limited both use and interest from broad consumer segments.
Earlier this year, Square Cash, Square’s mobile peer-to-peer (P2P) payment offering, launched the Cash Card, a physical prepaid product that customers can use to spend their Square Cash balance anywhere that accepts Visa.
Now, customers can also use their cards to withdraw cash from their balances at any ATM via their Square Cash PINs, a feature that’d been previously announced but didn’t go live until last week. Withdrawals will be fee-free from Square’s end, but customers could see out-of-network ATM fees set by ATM operators.
Mercator Advisory Group expects the ATM access to P2P funds will be expected by more consumers in the near term. The beta testing of Apple Pay Cash is underway, and while it does not explicit outline ATM cash access, the association with Green Dot makes the capability a relatively light lift. We expect the pervasiveness of P2P in all of its forms will expand consumer familiarity with the process and comfort in its use. More consumers being able to access funds via ATM will be a milestone for acceptance. Mercator Advisory Group delves further into the roles ATMs play in the 2017 ATM Market Benchmark Report.
ATM access represents an important step in making Square Cash P2P payments more versatile. Consumers who receive money through the service no longer have to rely solely on digital purchases or transfers to another account to access their funds. Instead, the Cash Card creates a bridge between a digital P2P balance and the extensive ATM infrastructure consumers already understand and use.
That connection could become increasingly important as competition in person-to-person payments intensifies. Financial institutions, fintech companies, mobile wallet providers, and technology companies are all looking for ways to make their P2P offerings more convenient and useful. Apple Pay Cash and other emerging services could eventually provide similar functionality, making easy access to cash an expected feature rather than a competitive differentiator.
More broadly, combining P2P payments with cards and ATM access demonstrates how the boundaries between traditional banking products and newer digital payment services are beginning to blur. Consumers increasingly expect funds to be available wherever and however they want to use them, whether that means sending money to another person, making a card purchase, or withdrawing cash. As P2P adoption spreads across generations, providers that remove barriers between digital funds and physical cash could be better positioned to encourage regular use. Square’s addition of ATM withdrawals therefore represents more than a new Cash Card feature; it is another indication that P2P payments are becoming a more complete part of consumers’ everyday financial lives.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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