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As millennials 'Venmo' each other money, banks fight back with their … – Los Angeles Times

As millennials 'Venmo' each other money, banks fight back with their … – Los Angeles Times

Odds are, you’ve at least heard of Venmo, but there’s also a good chance you haven’t used the mobile app or anything else like it to send money to family or friends.

But that’s likely to change over the next few years, as banks, payment companies and even the likes of Google and Facebook push so-called peer-to-peer, or p2p, payment systems — a medium of exchange with revolutionary potential.

The apps and online tools could someday overtake cash and checks as the primary way individuals pay each other, and they even could make inroads at the cash register and with businesses that send refunds and other payments to their customers.

These systems will get a boost later this year when a coalition of the nation’s biggest banks roll out Zelle, a mobile and online money-transfer network that will let any customer of nearly every U.S. bank send money to customers of any other bank using only a phone number or email address.

This summer, Early Warning, a company owned by some of the nation’s largest banks, will release Zelle, a payment system built to compete with Venmo and others — and, banks hope, to make digital p2p payments more mainstream.

Along with the release, Early Warning will kick off a marketing campaign showing not only how Zelle works but how it might be used. Lou Anne Alexander, president of Early Warning’s payments group, said the focus will be on appealing to older consumers who might not have tried p2p payments.

“We’re trying to take (p2p) from millennials to the mainstream –— customers might use a product like this,” Alexander said. “That might be managing contributions to the high school marching band or it might be renting a home on the beach with friends or family.”

Zelle traces it roots back to 2011, when Bank of America, Wells Fargo and JPMorgan Chase set out to build a system — initially called ClearXchange — that would allow their customers to send money to each other using only phone numbers and email addresses. Before, customers could only transfer money to friends and family by entering account and routing numbers — information customers often didn’t know and might be concerned about sharing.

Zelle is essentially a souped-up, rebranded version of ClearXchange. It will be available to anyone with a U.S. bank account, and it aims to overcome some of the limitations and confusion around the ClearXchange system.

Sarah Grotta of research and consulting firm Mercator Advisory Group said banks didn’t do a great job of explaining that ClearXchange would allow customers to send money to customers of other banks.

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