Internet Banks Improving Their Person-to-Person Payment Services
Last year I reviewed the person-to-person (P2P) payment services from three internet banks. These services allow you to send money to anyone with a US-based bank account using just an email address. There have been a couple recent improvements in these services at two of the internet banks.
One improvement has been made by ING Direct and its Person2Person Payment service. They recently launched Bump For iPhone which allows Electric Orange Checking account customers with iPhones to send money to one another. According to ING Direct's press release
With Bump technology, Electric Orange Customers can send money to each other by simply entering a dollar amount into ING DIRECT's mobile Person2Person Payment feature and "bumping" their two iPhones together. This will initiate an instant payment between their Electric Orange accounts. This makes it easy to pay a friend back for a meal and avoid the hassle of coming up with exact change.
This doesn't fix one important issue with ING Direct's Person2Person Payment service. That issue is that both the sender and receiver must have an ING Direct account to allow for a hassle-free transfer. Otherwise, the recipient must provide the sender his or her bank account number. ING Direct addresses this issue in its help center with the following Q&A:
My friends don't want to give me their account number – what can I do?
We understand the importance of security when it comes to account information. Remind your friends and family every time they wrote a check in the past, they were disclosing their account number, even if they didn't realize it. It's at the bottom of the check. Plus, unlike a paper check that touches many hands before being deposited, a Person2Person Payment is a secure, direct transfer between you and your friend.
If it isn't a close friend, convincing him or her that it's safe may be easier said than done.
For more details about this service, please refer to my Review of Person-to-Person Payment Services.
The other internet bank that has made an improvement to its person-to-person payment service is FNBO Direct. Its service is called Popmoney. As I reported last year, the one important downside with Popmoney compared with the other services is that there was a fee to send money. However, that has just changed, and now the standard delivery service is free. This standard delivery will send payment via ACH in 3 days. There is still a $10 fee if you want the next day express delivery.
One advantage that FNBO Direct's Popmoney service has over ING Direct's service is that the sender doesn't need the recipient's bank account number. If recipient's bank doesn't offer Popmoney, they can accept the payment through Popmoney.com. They will need to provide Popmoney their bank account and routing numbers.
For more details about FNBO Direct's Popmoney service, please refer to my Review of Person-to-Person Payment Services.
Other Person-to-Person Payments Services
The other internet bank with a P2P payment service that I reviewed is UnivestDirect. Many of this bank's internet accounts are a lot like ING Direct. They offer both a savings and checking account, and unlike ING Direct, you can write paper checks. The savings account rate used to be inline with ING Direct, but now it's less than half of the Orange Savings account rate. UnivestDirect's Person-to-Person Payment service hasn't changed since my review, but it continues to be free and like FNBO Direct's Popmoney, the recipient does not need to give the sender his or her bank account number.
Do you know of other banks offering person-to-person payment services? And what's your experience with these services? Do you prefer using PayPal, online bill pay or just a plain old paper check?
Banks Mentioned in this Post:
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