Home Credit union Payveris offers an alternative to Zelle to credit unions

Payveris offers an alternative to Zelle to credit unions

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Many credit unions have refused to offer peer-to-peer payments directly in recent years because demand from members was low, even as the volume of transactions for services like Venmo, Zelle, and the Cash app. de Square grew steadily.

The reluctance also stemmed from the cost of a service that typically does not generate revenue for the financial institution, as transfers are usually free or incur relatively low fees for consumers. It has been added worried about fraud and irrevocable payments.

But as the pandemic accelerated the use of P2P for urgent remittances for people unable to physically exchange money or checks, the credit union service organization PayverisCU started receiving more real-time P2P requests, seeing an opportunity for a transfer service aimed specifically at credit unions.

According to Marcell King, chief innovation officer at Payveris, the Cromwell, Connecticut company on Tuesday announced an exclusive real-time P2P payment service that leverages existing debit card rails from credit unions, which is an alternative to Zelle. and other applications.

The service allows credit unions using Payveris’ MoveMoney platform to send money to anyone with a US account using the recipient’s mobile phone number or email without downloading an app. distinct.

There is a catch: To verify identity, the sender must contact the recipient separately and provide a mutually agreed secret code word.

“Users have to contact the recipient and tell them to wait for an SMS and use any code word like ‘Redwood’, and they type it in when they receive the SMS to receive the funds,” King explained. .

When the recipient enters the correct secret word, the funds instantly flow to their account, King said.

Payveris risks damaging the user experience by requiring additional authentication, but the company says the move is less expensive than other methods, making the lack of revenue generation less of a concern. The company can also offer savings by limiting its marketing spend and using a proprietary engine on an app, King added.

P2P app-based services like Venmo, Zelle, and Cash App don’t require additional authentication, but King said many credit unions and users during a recent pilot program rated the process relatively weak. friction.

Consumer P2P services such as Venmo, Square Cash, and Zelle have grown significantly over the past two years and are playing a role in the financial services diversification strategies of Venmo’s parent company, PayPal, and Square, which use the information. P2P credentials registered to create financial services.

King says there is a niche for P2P designed for credit unions and small community banks.

“Venmo and Zelle have their own networks and applications, but when a recipient of these services is not already connected to one of the major P2P applications, they have to fall back on less technological approaches,” King said. away feel comfortable and safe by confirming each transfer with a code word.

Payveris’ cost to provide real-time P2P service to credit unions includes one-time implementation fees, monthly maintenance and transaction fees, and real-time transaction fees for each P2P payment that travels up the rails. Visa or Mastercard debit cards. The total cost of the new service is around 60 to 70 cents per transaction. Zelle did not comment on its cost structure.

Payveris, which previously offered slower P2P services through ACH, has developed a proprietary approach to real-time P2P by connecting directly to other institutions through the push debit payment rails of major credit card networks, a King said.

KeyPoint Credit Union in Santa Clara, California has been testing Payveris’ real-time P2P service over the past few months.

“We have seen a sharp increase in demand for P2P during the pandemic, with more members asking for increased support,” said by email Victor Smilgys, vice president of digital services at KeyPoint, an asset of 1.5 billion dollars.

The six-branch, 60,000-member credit union saw healthy use of the new P2P approach during the pilot project, Smilgys said.

Cost and fraud issues were one of the reasons KeyPoint had previously refused to offer P2P services, he said. If fraud is suspected, KeyPoint will suspend transactions until the credit union can directly verify the transfer with the sender, Smilgys said.

Payveris, which competes with Volante and Jack Henry & Associates in providing services to credit unions through its cloud-based platform, expects around 80% of the 300 financial institutions it supports offer real-time P2P services to consumers.


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