While there are plenty of tools that make it easier to get money deposited into a bank or debit card account, there aren’t many that make it easier to ask your friends or co-workers to cough up the cash when you pick up the tab after a night out. Will adding a social media component, like the one offered by P2P service Venmo, push back against those awkward money requests among friends?
Meanwhile, other companies are stepping up their investments in a variety of faster payment options, from blockchain-powered tools to P2P solutions to ACH. These investments in faster payments are focused on allowing the transfer of funds between parties to not only progress faster, but with greater efficiency and security. Some investments are focused on improving cross-border payments, while other solutions are aimed at adding additional security measures to protect customers from fraud by highlighting transactions that raise red flags.
The May Faster Payments Tracker™, powered by NACHA, highlights how several faster payment solutions are shaking up different industries, from health insurance to rideshare services.
News from the World of Faster Payments
Markets of all kinds could find new ways of conducting business thanks to the introduction of new payment solutions.
As they are rolled out, these faster payment tools are offering change to different types of businesses. For example, in the insurance industry, cloud-based insurance software provider One, Inc. recently introduced a new solution for insurance providers that allows them to send money from claims directly to a subscriber’s bank account, debit card or prepaid card. The rideshare industry is also finding new uses for faster payment tools. After introducing Instant Pay to a small share of its drivers last year, rideshare company Uber will now offer the program to all its workers. The service allows Uber drivers to get paid faster and has already been used to cash out over $1.3 billion in fares.
A look at recent data on faster payment activity highlights why many companies are stepping up their investment in solutions to speed up the delivery of funds. The most recent statistics from NACHA found that ACH transaction volume jumped by 5.3 percent to 25.5 billion in 2016, with an estimated value at $43.7 trillion. Meanwhile, in the P2P market, Early Warning Services reported 170 million P2P transactions valued at $55 billion were made in 2016. With high sums of money exchanging hands, companies are eager to get into the faster payments space.
But just because technology allows money to change hands faster, doesn’t mean there aren’t still obstacles. One of those obstacles is the social awkwardness of asking friends to pay their share of money for a night out. However, P2P payment platform Venmo is offering a way to make exchanging money more fun by integrating the experience with social media. For the May feature story, PYMNTS spoke with Venmo’s COO Mike Vaughan about how the company’s solution aims to eliminate “the awkwardness of money” for P2P payments.
Check out the May Tracker to read the feature story, along with a roundup of all the latest news and trends from the faster payments space.
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About the Tracker
The PYMNTS Faster Payments Tracker™, powered by NACHA, is your go-to resource for staying up-to-date on a month-by-month basis. The Tracker highlights the contribution of different stakeholders, including institutions and technology coming together to make this happen.