WASHINGTON—It’s time to play close attention to developments in real-time money movement and the shift occurring in uses for P2P, according to CO-OP Financial Services.
“We have had our P2P payments network up for a few years and we are looking to add to that,” said Caroline Willard, EVP, markets and strategy for CO-OP Financial Services in Rancho Cucamonga, Calif. “We are actively in negotiations with a couple of entities,” she told CUToday.info during CUNA’s Governmental Affairs Conference.
Willard said that CO-OP feels that eventually, possibly a few years out, there will be a large payments network for P2P. Willard added, however, the focus of real-time, account-based payments is shifting—away from paying friends for a shared expense to greater use for bill payment and, someday, even use at the point of sale.
“So we are building a really solid P2P foundation so that as new technology becomes available we can add things quickly,” said Willard. “You will be seeing some movement from us on that front in the coming months and years and we think this is pretty important.”
Paying For Pizza? Not So Much
Caroline Willard, CO-OP FS
Willard, acknowledging that many within the financial services industry thought P2P would take off for payments between people for shared expenses, noted that never happened.
“That’s what we originally thought P2P would be used for a great deal, but it’s not,” she said. “People are using it more to pay their rent, using it in an end-point-to-end-point (quasi-business) fashion, not to pay someone for the pizza they bought you last night.”
Willard said that cash and even occasional checks are still hanging on to cover those types of costs.
“So the real volume with real-time payments will eventually come from paying bills and being able to pay businesses,” said Willard. “That first business might be the babysitter, but it will grow well beyond that.”
Faster Payments
Willard said CO-OP’s attention to P2P became greater last year when the Federal Reserve kicked off its initiative around faster payments.
“We said, ‘OK, the Federal Reserve wants to speed up ACH, that is really interesting. What does that mean and might that take away some volume from card-based payments?’” she said. “I don’t know if that cannibalization will happen for quite some time, but I do think with the Federal Reserve not just studying but being engaged in real-time—or near real-time—payments, is an important trend.”