How RBC Put The Pizzazz Into P2P Payments

People love to give the gift of cash, and their friends and family typically love to receive it: Cash guarantees that the recipient gets a gift that he or she truly wants (and it’s never the wrong size or color!), which is a win for both parties.

However, cash doesn’t have much flair. Fifty dollars, a paper check or a gift card stuffed into a greeting card feels very impersonal, and is largely saved by the fact that it can be delivered in person. The giver can watch it be opened, and the recipient can say, “Thanks – I love this store!”

As money gifting goes digital, though, even that small personal element has been stripped away. A person-to-person (P2P) money transfer has even less flair than a few green slips of paper. When people give money to their loved ones as a gift, they want it to be more than transactional; they want it to be an expression of that love and the relationship they have with the recipient.

The Chinese have a tradition of presenting cash in a red envelope to make it feel a little more special. Inspired by this, startup tech company Vouchr set out to change the space of digital money gifting with a platform that serves anything that can be given P2P, including digital gift cards.

The startup launched with Interac in Canada first, enabling straight money transfers between just about anyone in the country. It then added other gifting mechanisms, like prepaid and gift cards. Vouchr next launched a full commercialization with Royal Bank of Canada (RBC), which essentially adds another payment rail for Canadian customers to use when gifting money.

A few months into the RBC partnership, Karen Webster caught up with Vouchr founder and CEO Rob Balahura and co-founder and COO Suresh Bhat to find out why the startup chose to take the approach it did, how it’s been going and what has surprised its co-founders about the launch.

Digitizing the Whole Package

Vouchr believes that cash gifting can’t be brought into the digital era by simply digitizing the payments aspect. The presentation must be digitized too, so that the money truly feels like a gift and not just another instant P2P transfer.

“It’s very, very simple for our customers to send money, but that wasn’t what we wanted to do,” explained Eddy Ortiz, VP of innovation and solution acceleration for RBC. “We wanted to create an experience where you can think about your friend, your husband, wife, whoever – and really put a lot of thought into it, and be able to send that gift to that person in an experience that’s even better than the physical world.”

That’s where Vouchr got to flex its creative muscles, Balahura said. Payments arrive with games and challenges that must be completed to free up the funds – anything from “Send me a video of your workout session at the gym” to “Come home from college and visit us if you want your money.”

The transfer can be embedded in an eCard or geo-tied to a location, so the recipient can only spend it at a certain restaurant or store – in which case, it becomes more like sending a gift card than sending someone money they can spend at a store.

Better yet, Ortiz said, it will soon be the gift card that keeps giving, as Vouchr and RBC work to add a reloading capability. That’s something that could be used by a mom or aunt to surprise a daughter or niece who loves shopping at a certain store – a simple, “Hello, I’m thinking of you; have fun!”

Finally, with all Vouchr transfers, there’s a built-in mechanism so the recipient can easily respond to say “thanks,” share that workout video or send a photo of the new outfit they bought with the money. If they want, they can even post transfers to share with their friends.

Worlds Collide

Sending money, Balahura said, is just another form of communication, like interacting over Facebook, Snapchat and WeChat. Seeing the power enjoyed by these massive social networks inspired Vouchr’s move to innovate and strip away the payments aspect to bring a social aspect to cash gifting.

Digital gifting also tends to be occasion-based and contextual, Balahura said, adding to the relevance of a social component.

But as with any financial transfer product, it’s not enough to provide a unique or seamless user experience. No matter how fun it is to send and receive these payments, the challenge is verifying credentials – something that a startup like Vouchr could not easily build into the platform.

Balahura said the company opted not to reinvent the wheel when building the financial mechanisms of Vouchr. Instead, the startup turned to banks, which already have users and credentials on hand, and where users are already turning for their payment-sending needs.

“We decided to bring the social network to them,” Balahura said. “That brings in the power, loyalty and retention to an existing model instead of starting from scratch.”

Becoming the Solution

Vouchr’s social network aspects can be rolled into a bank’s mobile wallet, said Balahura, and customized or expanded by the bank to provide a user experience and capabilities that are unique to the financial institution offering the solution.

“What we’re actually building and selling now is essentially a whole platform,” Bhat said. “We open it up so partners like RBC can build their own challenges and games. It makes it really sticky and unique. They can grow the platform by building on top of it, allowing for a ton of new experiences.”

The co-founders said that’s important because of the rapid commoditization in the space. There are so many ways to send the same thing: gift cards, cryptocurrencies and Apple’s new P2P payments, just to name a few very disparate examples. Banks will want to add their own flavor to make the service sticky.

Vouchr started out with the relatively simple goal of creating a way for people to respond to someone who sent them money or, at the very least, to confirm to the sender that the funds made it to their destination. But, said Balahura, the application for gifting and occasion-based activity soon became clear, and as this use case grew in popularity, so did the need for personalization.

Then the company ventured into communications around other types of payments – reimbursement for a dinner out, a tip for the gardener – that could be enhanced by adding a social element. After that, gamification and location-based challenges were just icing on the cake.

Balahura said that mobile unlocks many new capabilities that people weren’t thinking about when everything was web-based. Now, it just makes sense to include a social aspect or features like location-locking, since people always have their phones with them no matter where they go.

The Story So Far

Balahura said it’s too early to comment on trends and outcomes from the RBC partnership, but one bit of data he found fascinating was the popularity of the platform among non-millennial users. Every platform seems to want to woo that demographic, he said, and Vouchr was no different.

But while millennials do use Vouchr, they’re far from alone. An eCard element is very popular among non-millennials. Essentially, it allows the sender to enfold the digital money inside a digital greeting card – similar to those animated eCards that can be sent by email, but with a prize inside.

Balahura said the startup is testing new functions and experiences for all demographics, using technologies like augmented reality and games or leveraging GPS data to send recipients on a treasure hunt around the city to discover their funds.

Soon, there will be ways for the sender to reload digital gift cards that have already been given, Balahura said. That could introduce an interesting shakeup to the gift card market next month. Vouchr is also pushing its technology into the Pays (Apple, Google and Android) to enable tap-to-pay at stores.

Chalk it up to one more way that spending money is getting easier and more invisible every day.