When U.S. Bank announced the launch of its person –to- person mobile app through clearXchange, they attached a fee for the service when customers asked to have funds delivered in real time. As reported in Business Insider:
US Bank had charged $6.95 per real-time and $2.95 per next-day transfer, fees that could be cost-prohibitive for the lower-value transactions that P2P is popular for.
Pressure came from other non-bank services such as Venmo which offered its P2P solution for free. Although Venmo is not real-time for deposits to an account, the notification to the sender and recipient are in real time, which is good enough for some. With pressure coming from fintech organizations, other banks began to offer P2P services for free as well and U.S. Bank followed suit.
Since consumers voice their preference to get these services from their bank and the clearXchange service is in fact real-time, banks may have the upper hand here.
clearXchange could capitalize on the trust consumers place in their banks. No single firm has captured a majority of the mobile P2P market, which leaves room for banks to grab share, particularly because 75% of consumers would trust their bank most for a mobile wallet, according to ING. That level of trust could carry over to P2P products.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
Read the full story here