PayPal currently dominates the sphere of person-to-person (P2P) transactions, being the primary platform people use to send money to their friends and family. However, the process can often be cumbersome, involving logging into PayPal, authorizing it to draw money from your bank to your PayPal account, and then sending it to the recipient, who must also log into PayPal and subsequently transfer that money to their bank account. This process can be time-consuming, often taking over a week to complete.
In response to the growing demand for a simpler P2P method, some well-known banks like Bank of America, JPMorgan Chase, and Wells Fargo are developing clearXchange. This system would allow you to transfer money directly from your account to someone else’s by just inputting the recipient’s name, phone number, or email address. Nevertheless, the fees imposed for transactions will depend entirely on the individual banks. Therefore, when assessing if a participating bank’s fees are worth it, the cost should be compared with any transaction fee charged by PayPal.
At present, clearXchange is in the experimental phase; once it is launched nationwide, it will only be usable if both users have accounts at banks participating in clearXchange. The system thus has limitations until more than three major banks join the initiative.
There are already operational alternatives for P2P payments. For instance, Popmoney, which allows you to transfer money using a phone number or email address. To use Popmoney, you either need to have a bank account that cooperates with them or create a Popmoney account. The fees charged by Popmoney depend on the speed required for the funds to be transferred. If you’re sending a large sum of money, Popmoney might be a more cost-effective option than PayPal.
Additionally, Visa is planning to offer P2P payment options as part of its digital wallet, which is anticipated to launch in the fall. This e-wallet would allow individuals to make payments using their phones in several ways, thus eliminating the need to carry physical credit or debit cards. Even Google is working on a similar project and plans to launch its Wallet soon, although its initial use will be limited to those who hold a Citibank-issued MasterCard with PayPass, and the Wallet presently doesn’t support P2P transactions.
In conclusion, with the advancement in digital technology, there are numerous new payment options on the horizon that aim to make the process of sending and receiving money more streamlined and convenient.
(Information provided by SmartAsset.com)
