Person to person (P2P) payments are quickly becoming a regular feature of today’s banking industry. ClearXchange, the P2P payment platform that developed as a partnership between Bank of America, Chase, and Wells Fargo, has announced that it has added Capital One to its list of owners. Capital One is the second FI to join clearXchange (the first institution was the regional FI FirstBank) and is scheduled to go live with the service later in 2014. According to Javelin data, the addition of Capital One now gives clearXchange the capacity to reach 40% of all U.S. banking adults and 53% of all adult credit cardholders.
ClearXchange has clearly upped the ante in the P2P payments game, but they aren’t the only competitors in the field. Fiserv’s Popmoney platform boasts considerable consumer reach as well, having access to more than 40 million online banking customers and reaching 15 of the top 30 FIs (as of August 2013, see Javelin’s 2013 A2A and P2P report for more information). Popmoney recently expanded its product offering through its Popmoney Instant Payments service, which enables customers to make real time money transfers. This new service is just beginning to roll out to FIs, with First National Bank of Pennsylvania being one of the first banks to offer the service in December 2013. While Popmoney and clearXchange are not the only competitors in today’s P2P space, they are certainly the most powerful within the banking industry.
The key to a successful P2P payments platform is all about numbers, and both players have established significant reach to banking customers that make it very difficult for up-and-coming platforms to compete with. Developing platforms might have more success gaining traction in the 3rd party P2P realm, but then they would have to contend with the powerhouse PayPal. Competition is tough, but this is all good news for consumers since it indicates that P2P payments may finally become an everyday reality.