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Person-to-Person Mobile Payments

You might have seen this new phenomenon, but if you haven’t – this is what it looks like. You’re out at breakfast. Nearby is a table of twenty-somethings who just got their bill. Suddenly, instead of pulling out their wallets, they all pull out their phones. You think, maybe they’re all calculating tip? Nope, they’re all sending payments directly to their buddy, that guy who just picked up the bill. Meanwhile, he’s racking up some cash-back dollars by paying with his rewards credit-card while his friends send the funds over instantly, using their phones.

With Apple’s early 2018 launch of text-message payments, the Person-to-Person payments space rocketed from a possible trend to a concrete player in the payments space. In the Spring of last year, more than 700 million iPhones were in use worldwide, according to an estimate from BMO Capital Markets analyst Tim Long. That number only continues to grow. This means that Person-to-Person payments are going to stick. Let’s look at who is playing the game.

Vemno, owned by PayPal 

“Venmo is a mobile payment service owned by PayPal. It allows users to transfer money to one another (within the U.S. only) using a mobile phone app or web interface. It handled 17.6 billion dollars in transactions in 2016. In Q1 of 2017, it handled 6.8 billion dollars in transactions, which more than doubled its volume in Q1 of 2016.

Cash transfers using Venmo are not instantaneous and can be cancelled after an initial transfer is sent. The transfers can take one to three business days to become final. The Better Business Bureau has reported that some scammers have been exploiting the cancellation feature on Craigslist and in other contexts.” [source]

Zelle, owned by Early Warning

“Zelle is a U.S.-based digital payments network owned by Early Warning Services, a private financial services company owned by the banks Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, US Bank, and Wells Fargo. The Zelle service enables individuals to electronically transfer money from their bank account to another registered user’s bank account (within the United States) using a mobile device or the website of a participating banking institution. The Zelle service was launched in 2017.

Early Warning Services has also operated a somewhat similar service called clearXchange that offered payment services through member financial institutions and a website. Launched in April 2011, clearXchange was originally owned by Bank of America, JPMorgan Chase, and Wells Fargo, and after Capital One and US Bank joined as additional partners, was sold to Early Warning Services in January 2016. In December 2017, all clearXchange accounts for person-to-person payment services were deactivated and the web interface was discontinued. However, clearXchange continues to operate as a payment service for companies and government entities.” [source]

Square Cash

“Square Cash (stylised as Cash) is a mobile payment service developed by Square, Inc., allowing users to transfer money to one another using a mobile phone app. As of February 18, 2018, the service recorded 7 million active users.

The service allows users to request and transfer money to another Cash account via its app (dubbed as Cash App) or email. Users can then choose to withdraw the money with its debit Visa card (dubbed as Cash Card) in ATMs or transfer it to any local bank account.

The Cash Card is a black, customisable card. Users are asked to sign their name on the mobile app. The signature will then be printed into the card and sent to the user.

Square Cash also introduced their unique username, known as a $cashtag. It allows users to transfer and request money from different users by entering such username.”  [source]

Google Pay Send (formerly Google Wallet)

“Google Pay Send is a peer-to-peer payments service developed by Google that allows people to send and receive money from a mobile device or desktop computer at no cost to either sender or receiver. When set up, a Google Pay account must be linked to an existing debit card or bank account in the United States or United Kingdom.

Google Pay Send can be used through the Google Pay Send app and Gmail. The app is available for Android devices running Android 4.0 and above, and for iOS devices running iOS 7.0 and above.

Since 2018, Android Pay and Google Wallet have unified into a single pay system called Google Pay. Google Pay Send, a feature included inside Google Pay, has replaced the Google Wallet service.”  [source]

Apple Pay 

“Apple Pay is a mobile payments service that allows users to make payments in person, in iOS apps, and on the web. It digitizes and can replace a credit or debit card chip and PIN or magnetic stripe transaction at a contactless-capable point-of-sale terminal. It is very similar to contactless payments already used in many countries, with the addition of two-factor authentication via Touch ID, Face ID, PIN or passcode. The service lets Apple devices wirelessly communicate with point of sale systems by using a near field communication (NFC) antenna, a “dedicated chip that stores encrypted payment information” (known as the Secure Element), and Apple’s Touch ID and Wallet.”  [source]


As the mobile payment space continues to expand, security concerns are at the forefront of many consumer’s minds. While all of the providers mentioned in this article take customer data and security seriously, mobile devices are still prone to phishing attacks and potential fraud. New phone features, like biometrics -fingerprint scanning and facial recognition- might reduce some of the risks, but only time will tell.

If you do decide to jump onboard the mobile payment bandwagon, be sure to always keep an eye on your credit card accounts and linked bank statements for any purchases or transfers that you did not authorize.