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Venmo can now instantly transfer money to your debit card for 25 cents
- toomuchtodo 9y agoZelle [1] moves money in minutes, with no charge [2], as long as your bank is a participating institution [3] and you've previously enrolled. Hard to see Paypal competing against a syndicate owned by major financial institutions (Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, US Bank, and Wells Fargo). At the same time, all of these efforts die as soon as ACH modernization arrives [4], as shown by SWIFT instant payments (which occur in a matter of seconds between institutions) [5][6]. Disclaimer: No affiliation, just a fintech enthusiast. [1] https://wikivisually.com/wiki/ClearXchange https://wikivisually.com/wiki/ClearXchange [2] https://www.zellepay.com/support/how-long-does-it-take-to-receive-money-with-zelle https://www.zellepay.com/support/how-long-does-it-take-to-re... [3] https://www.zellepay.com/get-started https://www.zellepay.com/get-started [4] https://fedpaymentsimprovement.org/ https://fedpaymentsimprovement.org/ [5] https://www.swift.com/your-needs/instant-payments https://www.swift.com/your-needs/instant-payments [6] https://www.npr.org/templates/transcript/transcript.php?storyId=229224964 https://www.npr.org/templates/transcript/transcript.php?stor...
- hayksaakian 9y agoIt works out of the box with chase and you don't need the app, and you don't need to fill out any forms to make it work. This makes checks obsolete for me. The only advantage they had was 0 fees, but now zelle is my best option for price and speed.
- deleted 9y ago[deleted]
- giancarlostoro 9y agoSame with Bank of America. I can send my fiancée (and vice versa) money through Zelle (she has Chase) fairly quickly.
- chatmasta 9y agoVenmo has pretty strong network effects, to the point that its users use “Venmo” as a verb. That will be tough to overcome.
- toomuchtodo 9y agoVenmo doesn't have the capabilities of a checking account, which most adults need and Venmo is unlikely to offer (direct deposit, bill pay, etc).
- iamdave 9y agoI didn't read the previous comment as a suggestion that they were looking to Venmo as an alternative to a checking account, but rather as a purse where money goes temporarily until it ends up at the final destination: said checking account (or another user or service that takes payments from venmo). That's how I and many services I use-like the furniture movers I paid a few weeks back-the App Or have I misunderstood something, perhaps?
- toomuchtodo 9y agoMy thesis is Venmo is a feature, not a product. Real banks will eventually replace the need for it (technically, they already have; the UX needs some catching up).
- giancarlostoro 9y agoZelle is usable out of the box with Chase and Bank of America in the respective banks apps (and I'm guessing other participating banks) it's kind of a paypal for banks that just works.
- chatmasta 9y agoThat may be true, but it doesn’t mean customers are going to use it. The fact that millions of 20-30 year olds in the USA tell each other “Venmo me” is quite a bit of inertia to overcome. Then again, perhaps Zelle will capture the non 20-30 demographic, which is presumably quite large. Most 20-30 year olds have both their banking app(s) and Venmo installed, whereas many in the 30+ demographic have only their banking app. In the 30+ demographic, Zelle is a new entrant to the “peer-to-peer payments” market, and has a first-mover advantage. Since this demographic is not as intimately familiar with p2p payments as the 20-30 demographic, Zelle has the opportunity to concept of peer-to-peer payments. That is, Zelle has a clear playing field in the battle for the “tipping-point” mindshare required to solidify its first-mover advantage in certain markets. It would be interesting to map the “real” human social graph, and then overlay app usage onto it.
- pbreit 9y agoAll of your lofty pronouncements are predicated on the opinion that speedier money movement is in high demand which has been shown over and over to be false.
- toomuchtodo 9y agoThe demand and uptake of person to person funds transfers in other markets is obvious. People don’t care the money moves drastically faster, banks most definitely want to save on the costs of these transactions.
- underhill 9y agoThis is totally anecdotal, but I (and apparently many other people online) have had pretty terrible experiences with Zelle, moreso than I've noticed with other fintech services. A family member tried to send me money, which used to work perfectly fine via the bank's older transfer methods (including PopMoney), but once the bank switched to Zelle they somehow lost the transaction completely because my bank had yet to integrate with it. Zelle's app and help pages were terrible and directed me to create an account and download the app to get the money out. I did that and the money was still nowhere to be found. The bank customer service wouldn't touch it because it was Zelle's fault, and my family member apparently had to wait on hold for an extremely long time with Zelle to get it sorted out and get the money back in their account. I can only imagine how much of a nightmare that could have been for less financially-secure or tech-forward people.
- jedberg 9y agoUnfortunately the only targets for ACH modernization right now are same-business-day, which means if I send money in the morning it won't get there till the evening, and if I send it Friday at 6pm, you won't get it until Monday at 5:30pm. The downside to Zelle is the sending limit, which is pretty low for any sort of business transaction.
- PTRFRLL 9y agoFree instant transfer was my favorite part of Square Cash, too bad they now charge a 1% fee.
- felipellrocha 9y agoHow were they making money previously?
- LethargicStud 9y agoThey weren't, they were losing a lot.
- dawhizkid 9y agoInteresting...I must be grandfathered in because all my transfers are still instant/free.
- pbreit 9y agoI do not understand how same-day vs next day is such a big deal. And 1% fee is like 400% annual percentage rate. Is that even legal?
- xenity7 9y agoIt’s not a loan, and the 1% fee isn’t an interest rate, so annualization doesn’t make sense and usury laws don’t apply.
- pbreit 9y agoGetting money today that you would normally get tomorrow is a loan. And whatever you are charged is the interest rate.
- whack 9y agoUsury laws prohibit interest rates >20%, because otherwise, there are people who would actually be paying back 20% more than the amount they borrowed. In your example, that's impossible - the additional "interest" you're going to pay is never going to exceed 1% of the money you "borrowed"
- apearson 9y agoThis is similar to what Google Wallet does right?
- giancarlostoro 9y agoUsed to do... Since they closed up Google Wallet. But yeah, it was easier to transfer money through Google Wallet.
- ezekg 9y agoAre you sure? I used Google Wallet a couple weeks back.
- jkaplowitz 9y agoCan confirm, I've used Google Wallet multiple times recently, including last night. My experience matches what they document here, except that I've never personally seen the rare upper bounds for debit card transactions or for sending via bank account: https://support.google.com/wallet/answer/6285486?hl=en https://support.google.com/wallet/answer/6285486?hl=en There was some rebranding news recently; you may see them consolidate various payment brands into the term Google Pay. But they're keeping their p2p payment feature. Disclosure: Although I used to work at Google, I don't now and have never worked on their payment tech. I'm just a satisfied user who finds PayPal/Venmo a shady enough company to avoid when decent alternatives exist to accomplish the goal.
- giancarlostoro 9y agoI'm thinking of the Wallet Card they used to have: https://support.google.com/wallet/answer/6285510?hl=en https://support.google.com/wallet/answer/6285510?hl=en Google Wallet hasn't behaved the same for me since.
- thewildwes 9y agoI still use this service very regularly, including yesterday. Works well and instantly.
- 9y ago
- bouvin 9y agoListening the HT Guys podcast earlier today highlighted that apparently your transactions are not private by default—one of the hosts could inspect his contacts’ dealings with impunity. In Denmark, we have MobilePay and it is everywhere—I very rarely need to use cash to pay someone, and it certainly has made sharing a restaurant bill a breeze.
- cavanasm 9y agoWhen I used Venmo for the first time, I had this concern as well, but the cost of the transaction is private to everyone outside of the parties involved (and this isn't an options choice). I switched all my transactions to private, personally, but the public by default nature of Venmo seems very intentional. They're trying to create a social network like atmosphere around payments it seems.
- pbreit 9y agoThis feature is almost certainly the key reason Venmo became successful.
- astronautjones 9y ago
- jedberg 9y agoThe other day I learned that ACH transfers are going to become same-business-day sometime around April this year. Not quite instant, but a lot better than before. Still doesn't hit the use case of cash on the weekend, but at least now the American banking system is only 20 years behind Europe instead of 50 years...
- vikascoder 9y agoAnd in India transfers are instantaneous within banks. Beats me why in the US it takes 3 days.
- foobarbazetc 9y agoLegacy and greed.
- jedberg 9y agoBecause by making it a long time the bank can charge you $45 for a wire transfer, which is instantaneous and can be for any amount.
- martin_bech 9y agoSame business day? What year is this?? Many places in the rest of the world, have realtime money transfers.
- dietr1ch 9y agoSounds like a shithole country to me
- numbers 9y agoFacebook Cash does this for free and instantly.
- bob_theslob646 9y agoThe question is what is the true cost of transferring money and is Facebook losing money every time it does it in order for users to get addicted to using their service?
- Spivak 9y agoI mean Google Wallet also xfers for free too with basically no strings attached. Might as well take advantage of loss-leaders while they're around.
- smachiz 9y agoHonestly, pennies. Post Durbin amendment, Debit transactions are very, very cheap.
- foobarbazetc 9y agoMuch, much cheaper than 25c.
- mapgrep 9y agoOh wow great, I can pay 25 cents to banks and a startup to do something that was free and instant with cash and free and only mildly less instant with paper checks. Venmo, PayPal et al are great examples of how the big barriers to convenience in our society are often fundamentally social and political, not technical. The technology to enable two people with smartphones to exchange money is trivial. Even the authentication bits can be made pretty trivial. But try and hook this up to where people are obligated to keep their money (banks) and to whom they must report their activities (governments, merchants, etc) and greed and other externalities conspire to ELIMINATE any savings or other benefits from the tech and actually make the situation MORE costly, less private, less safe, etc. Venmo can give me money instantly for 25 cents is about as exciting as Facebook being able to replace my rolodex at the cost of lost privacy and contentment which is about as exciting as ugly, hard-to-navigate, and unlendable Kindle e-books being able to replace actual books from real publishers.
- austenallred 9y ago> to do something that was free and instant with cash and free and only mildly less instant with paper checks. Running down to the bank to cash a check is pretty damn far away from "free and instant."
- closeparen 9y agoNo, but “write out a paper check and have the other person photograph it with their bank’s app” is still the only universal and free peer to peer electronic payment method in the US. (Cash requires trips to the teller window during banking hours if your transactions are not all multiples of $20).
- jedberg 9y agoYeah but if you do that usually you're only limited to about $100 of that check being available until it clears three days later.
- 9y ago
- jonbarker 9y agoInternationally?
- phusion 9y agoDespite all the negativity, as a filthy degenerate, I missed the previous ability to get a Paypal debit card and instantly withdrawal money sent to my PP acct with it. This should be useful..
- Larrikin 9y agoI wish the Zelle roll out wasn't so terrible. They need to release and market a stand alone app and take away Venmos base. There's no need for PayPal to be involved in my transactions.
- Terretta 9y agoIn 10 hours since post, no mention of Apple Pay Cash’s relatively frictionless integration in Messages (iMessage), so adding a link: https://support.apple.com/en-us/HT207886 https://support.apple.com/en-us/HT207886 There’s no fee to use Apple Pay Cash with a debit card, and it’s as fast as any other text message.
- pwnage 9y agoStill takes 2 days to cash out to bank account though right?