Long gone are the days when friends ended a group lunch by scrounging around for the correct change to split the bill. Today, the internet makes it easy to send money to a friend in seconds—all online and all from the palm of your hand.
Thanks to the speed and convenience of online peer-to-peer (P2P) payments, researchers estimate that 126 million Americans will be using mobile devices to send money to friends in 2020. If you’re curious about these services but aren’t sure where to start, this article is for you. Read on to learn how P2P payment providers can make your life easier and compare four of the most popular options you can tap into today.
What You Need to Know
PTP providers are designed to make it easy to send and receive money from friends. Most require an email address or phone number to get started. Once setup is complete, you can send payments through deposit (savings or checking), credit card, or prepaid card accounts.
Some services will also allow you to hold funds within the account itself to cut down on the time it takes for money to swap hands. Fees vary, as does the length of time it takes for the funds to hit the recipient’s account. Some providers still make you wait a day or two, but increasingly, the money’s there in real time or close to it.
So whether you’re splitting a restaurant bill, paying a babysitter, or sending some cash to Junior at college, P2P apps and websites can make your life easier. Here are some of the most popular players you can try.
First on our list is PayPal, the undisputed pioneer of peer-to-peer. Its roots date to 1998, when it served as a payment provider for eBay, the online auction giant. When you send friends or family money via your U.S.-based bank account or PayPal balance, transactions are free. They do, however, charge for credit card transactions, so keep that in mind when setting up your account and preferred payment methods.
Venmo is a mobile app owned by PayPal but designed with a social media flair that makes it popular with younger generations. The app features a news feed of sorts that shows when and where friends are using the app (but not how much they’re spending). Like PayPal, Venmo is free to use unless you opt to fund your payments via credit card.
Like the first two options, Zelle makes it easy to safely and securely send money directly to friends and family. Rather than being a standalone service, Zelle is a creation of the nation’s biggest banks and their technology partner, so it’s generally accessed through a bank or credit union’s mobile or online banking site.
This means the service may already be available to you through your bank’s app or website, and you won’t need to download a new app to use it. (If your bank doesn’t offer Zelle, however, there is still an app you can download and connect to your debit card.) And rather than offering a middleman account like some of the other providers do, Zelle sends money directly from one bank account to another.
#4: Facebook Messenger
When Facebook first gave its vast user base the ability to send cash payments through its Messenger chat service in March 2015, use quickly soared past a million payments a day. Today, PayPal has been integrated into the app’s payment service, making it even easier to use.
Users love how simple it is to split payments among multiple users in Messenger. On the other hand, funds availability can vary and payments can take longer than when you use a service like Zelle, which immediately moves money into deposit accounts.
If these popular providers still don’t meet your needs, don’t give up. Other players that can simplify your life include digital wallets like Apple Pay and Google Pay or Cash App, the P2P service from small-business payments specialist Square.
Whatever you choose, remember that online payments of any kind rely on seamless, reliable cellular or internet service. Call Race today to make sure you have the fastest and most secure connection available.