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13 firms with a ‘transfer money’ app that makes paying as easy as sending a text

P2P payment app P2P payment app

Is there money to be made from friends splitting restaurant bills? These companies think so.

When Venmo launched its P2P payment app in 2012, the concept was pretty simple. Anyone who signed up for the app and assigned their card details to it would be able to send any other user a payment.

They could make a transfer just by selecting a name from their address book, typing in the amount and pressing send.

No need to ask someone for their bank details. No long forms to fill in.

It was a simple idea, and it worked.

In the fourth quarter of 2014, Venmo processed $906 million. That’s up 29 per cent on 4Q 2013.

But in the process of supporting all these transactions, something weird happened.

Venmo had made it possible for users to include a short sentence describing their transaction.

Now, who the hell would want to broadcast details of last night’s pizza?

And who the hell would want to read about it?

Well, it turns out that thousands do. In no time, Venmo became a kind of social network – especially when users began to exaggerate and fabricate what payments are for.

Examples from a Mashable article include:

“Funeral expenses for bulldog mauled by gator” and “Your wig is at my house.”

In the funny world of tech startups, it could be that Venmo’s optional add-on – the comment – could be its salvation.

Why? Because the company now has a growing army of competitors. It needs a differentiator.

While in-store mobile payment has struggled to take hold among confused consumers, P2P payment apps have built a certain momentum.

That’s brought many startups into the market. Ominously for Venmo and others, it’s also prompted Facebook and Google into the space.

So let’s go on a quick tour…

1. Venmo

venmo-iconThe US app is arguably the flag-waver for the whole P2P mobile payment apps thing.

Venmo has around 1.5 million users. That’s not a huge amount, but the number is growing and the users are passionate devotees.

Indeed, they’ve turned the service into a kind of social network with their enthusiastic posting of payment-related messages.

The service processes around $1.3 billion a quarter. It’s now owned by PayPal (which bought its parent Braintree in 2013).

2. Facebook Messenger

Facebook-Messenger-iOS-iconWhen Facebook first confirmed it would ‘unbundle’ its mobile service and create a discrete Messenger app, observers concluded it would eventually incorporate payments inside it.

After all, the firm had employed ex head of PayPal Mobile, David Marcus, to run it.

Mark Zuckerberg denied it. He recently said Facebook wasn’t going to take “the cheap and easy approach and just try to put ads in or do payments and make some money in the short term. We’re not going to do that.”

He did though.

Thus, the user opens the Messenger app and starts with a message to a friend. He or she then taps the $ icon and enter the amount to send.

They then click Tap Pay in the top right and add their debit card to send money.

The recipient also has to add their card, and once they do they can accept money any time it’s sent.

More recently, the social network expanded the service to allow payments between groups.

3. Square Cash

unnamedSquare has had a chequered history. It pretty much invented mPOS (the practice of receiving card payments via a portable card reader and mobile app), but its attempts to expand its activities into other areas of payments have been less successful.

One that’s still very much live is Square Cash.

This simple P2P payment app lets registered users pay each other using either an email address or phone number.

In April, it widened the idea to enable paying a business. It introduced $Cashtags as unique identifiers – a bit like mini URLs – which businesses can set up and then use as destinations for payments.

They create and register their $Cashtag via the Cash app or website, then print it on a POS, business cards, twitter accounts etc.

4. Google – Pay by Gmail

gmailIn 2013, Google started testing a service in the US that lets Gmail users to send money to friends over email.

Users sign up for Google Wallet and assign their bank details. Then they open up Gmail and then click the $ sign on the the attachment paperclip. Then they enter the amount, and press send.

If the recipient is also signed up, they get the money immediately. If not, they get a message requesting they join so they can receive the funds. Transferring money is free.

Weeks ago, the service was also launched in the UK.

5. Snapchat – Snapcash

snapchat-icon-218x220Out of the blue last November, Snapchat suddenly entered the payments space with P2P payment app Snapcash.

Cue loads of jokes about self-destructing transactions.

It seemed a bit weird that a messaging platform built around transient messages would get into payments. But Snapchat is clearly looking at many different strategies for its 100 million users into revenue.

Snapcash is a partnership with mPOS firm Square, built on the rails of the latter’s Square Cash service.

The app lets users assign a bank account to their Snapchat account and then type a dollar amount they’d like to send in a message to another Snapcash user.

They then press send on a green payments button.

Snapcash is available only to adults Snapchat users in the US.

6. Swish

unnamed-1The Nordics are among the world’s most enthusiastic users of mobile payments, even if their activity is often overlooked by the Valley-centric digerati.

Swish is a P2P payment app owned by six Swedish banks (Danske Bank, Handelsbanken, Länsförsäkringar Bank, Nordea, SEB and Swedbank). It has approaching three million users, and is pretty much mainstream among Swedish consumers.

As it has grown, Swish has expanded its ambitions. In July 2014 it expanded its service so it could also be used by businesses.

And a few weeks later, the JV launched a mobile card reader to bring it into competition with its compatriot iZettle and other mPOS players.

7. MobilePay

MobilePay-logoDenmark’s MobilePay is, with Swish, the big success of the Nordic P2P scene. The service was built by Danske Bank, but is available to customers of other banks too.

More than 1.6 million Danes use it – which means it’s on one in three smartphones.

As with Swish, MobilePay is now being used by businesses too. Indeed, the P2P payment app features a GPS-enabled nearby list of shops that accept it.

They include the giant supermarket chain Dansk Supermarked – which operates 556 Netto, Føtex, Bilka and Salling stores.

8. Paym

paym_ebanking_logo1Paym is the name of the ambitious scheme launched by the UK Payments Council to link all UK phone numbers to bank accounts.

It launched in April 2014. In 100 days it had one million registrations.

As with similar schemes, it lets users assign their account details to their phone numbers inside an app. This means they can pay another person without ever needing to get their branch and sort code details.

It’s work began in 2012, when it started to recruit member banks to participate. Today, they include Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB.

The one million users transacted about £6.5 million through the channel in those first 100 days.

Now, Paym is closing in on 2.5m users.

9. Barclays Pingit

Barclays-Pingit-LogoBarclays gets a lot of credit (well-deserved) for being among the first traditional banks to launch a dedicated P2P payment app.

Pingit launched in 2013 to let any user pay another using just their phone number, regardless of whether they are already registered Barclays customers.

It doesn’t require the consumer to hand over any account details.

Pingit has been very successful given the rise of competitive apps (not least Paym – see above). The app has received 3.7 million downloads, and over £1 billion has been transacted across it.

Incredibly, one user bought a house using it.

Earlier this year, Barclays announced it would allow people to pay each other via Pingit with just their Twitter handle.

10. Payfriendz

icon175x175Most of the services in this list either belong to banks or giant web firms (Facebook, Google). But this hasn’t stopped smaller indies from trying to compete.

Germany’s Payfriendz, for example.

The firm believes its app benefits from a better UI and also the fact that it is not part of the banking system – which many consumers distrust.

It doesn’t charge any fee for domestic transfers (though it does add one per cent on currency exchanges).

Instead, it wants to make money from affiliate fees when users make a payment through the app to a merchant such as Amazon.

And it will enable these purchases through a virtual Payfriendz MasterCard that comes bundled inside the P2P payment app.

Users can simply touch the image of the card to copy its number, which they can then paste into an e-merchant’s checkout basket.

11. Nooch

icon175x175Nooch could be seen as a close competitor to Venmo, and it is. But though the two US firms share the same basic P2P payment app approach, they differ widely on social.

Basically, Nooch rejects the idea of sharing info about your purchases, and errs on the side of total privacy.

There are no fees to send or receive money on Nooch, which links to checking accounts on large banks like Bank of America, TD Bank, PNC Bank, Wells Fargo, Capital One, CitiBank and more.

Users can request money from up to 10 people simultaneously.

12. clearXchange

ClearXchange copyclearXchange is a US version of the UK’s Paym or Sweden’s Swish. In other words it’s a JV by the banks to create a single P2P app that works for millions of customers.

Members include U.S. Bancorp, Wells Fargo, JPMC, Bank of America and Capital One.

In truth clearXchange hasn’t made the impact of its European counterparts even though it has the potential to reach 50 million mobile customers.

13. SIA – Jiffy

jiffyItalian payment processing specialist SIA launched P2P payment app Jiffy with support from most of the Italian retail banks.

The app is based on the SEPA Credit Transfer, and works on Android, Apple iOS and Windows Phones.

So, to that extent, it’s rally like an Italian version of Paym or Swish.

But SIA has a plan to extend it to all 400 million European current account holders. How? By linking the user’s IBAN code to the phone number. Then the user would open the Jiffy app, choose a contact, enter the amount and an optional text message, then click to send the funds.

SIA is targeting Belgium, the Netherlands and the UK first.