There’s no question that online banking has transformed the way we handle money. And you don’t have to look any further than person-to-person payments for proof.
Person-to-person payments, also commonly referred to as “peer-to-peer payments” or “peer-to-peer transactions”, have revolutionized the way people can send money to each other. It doesn’t matter if it’s a friend sitting next to you in a restaurant or a family member across the country – you can send and receive funds electronically in a matter of a few days, if not a few hours, depending on which person-to-person payment service you use.
If you have a bank account or credit card, you can use it to make a person-to-person payment using online technology that lets you transfer funds from your accounts via the internet, using a computer, smartphone, or tablet.
There are two basic approaches to person-to-person payments. With one approach, users establish secure online accounts with a trusted third-party vendor (such as PayPal or Venmo), designating which bank account or credit card they’d like to use to transfer and accept funds. The third party's mobile app or website is then used to send or receive funds. Users typically are identified by their email address and can conduct fund transfers with anyone who is also a member of that same third-party network.
With the second approach, customers use their financial institution’s online banking interface or mobile app to designate which account they’d like to transfer funds from, and the amount of funds they’d like to transfer. The recipient is identified by either their email address or phone number, and they do not have to be a member of the same financial institution as the sender. Once the sender has initiated the transfer, the recipient will typically receive an email or text message with instructions on how to deposit the payment into their account. In some cases, the sender will have already designated exactly which account the money should be transferred to, and in that case the recipient will simply receive a notification alerting them that the transfer has taken place.
Before initiating a person-to-person payment, it’s a good idea to check into such things as fee structures, funds availability, and privacy practices.
- Fee-related questions to consider before choosing a person-to-person payment service include whether there are charges to sign up, send money, or receive money. At Bank5 Connect, there is no fee for Standard Delivery of person-to-person payments, however fees may be incurred if Expedited Delivery is selected.
- Check into the service’s policy regarding when funds will be deducted and when they will be available to a recipient once a transaction has been initiated. Some services are quicker than others in this respect.
Bank5 Connect’s person-to-person payment service is called Pay People, and is available through our online banking system. To learn more about Pay People, or to sign up for online banking and begin taking advantage of person-to-person payments, visit us here.