Simple Launches Realtime P2P Functionality — on PayPal’s Rails?
Simple launched realtime person-to-person (P2P) payments today, the company announced in a blogpost. The functionality currently only works online, but will be rolled out to the company’s iOS and Android platforms soon.
The service is called Instant and is marketed as a way to settle up with friends or spouses. Simple customers previously sent each other checks through the service to perform the same function, according to the blogpost. Simple joins Dwolla, Fiserv, Square, Google, GoBank and a few others in offering realtime payments across its network. Generally, if a provider controls both ends of the transaction, realtime is possible, but even so, most P2P services require up to a day or more to verify the transfer of funds.
Instant payments are a thorny issue in the US (though not elsewhere in the world), with big banks showing a distinct lack of interest in the service and federal regulators likewise showing reluctance to force the issue on the industry. It is left, therefore, to the smaller innovative players, such as Simple, to take on the challenge — and the risk — involved in sending realtime payments on top of a batch processing system.
The Bancorp, which provides Simple’s banking infrastructure, struck a deal with PayPal in 2012 allowing the eBay subsidiary to serve as The Bancorp’s P2P payments provider. PayPal is known for not transmitting payments instantly, but rather sitting on the funds for as long as five days. That said, PayPal has taken steps to speed up its payments with the recent acquisitions of Braintree, owner of Venmo, and yesterday, StackMob. PayPal finalized its ownership of Braintree and Venmo today.
When asked if Simple’s service was built on Popmoney (a Fiserv property that recently launched a realtime service) Simple CEO Josh Reich replied simply, “No.”
Simple’s announcement today prompted a long exchange on Twitter, with some customers praising the change and other saying it is not enough. Simple told this latter group it is working on rolling out a more robust solution for joint accounts, which is a common concern for the new breed of bank accounts.
https://twitter.com/Simplify/status/413725981057495041
