
Venmo can now instantly transfer money to your debit card for 25 cents - middle1
https://www.theverge.com/2018/1/26/16936626/venmo-instant-transfer-paypal-payment-app
======
toomuchtodo
Zelle [1] moves money in minutes, with no charge [2], as long as your bank is
a participating institution [3] and you've previously enrolled. Hard to see
Paypal competing against a syndicate owned by major financial institutions
(Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, US Bank, and
Wells Fargo).

At the same time, all of these efforts die as soon as ACH modernization
arrives [4], as shown by SWIFT instant payments (which occur in a matter of
seconds between institutions) [5][6].

Disclaimer: No affiliation, just a fintech enthusiast.

[1]
[https://wikivisually.com/wiki/ClearXchange](https://wikivisually.com/wiki/ClearXchange)

[2] [https://www.zellepay.com/support/how-long-does-it-take-to-
re...](https://www.zellepay.com/support/how-long-does-it-take-to-receive-
money-with-zelle)

[3] [https://www.zellepay.com/get-started](https://www.zellepay.com/get-
started)

[4] [https://fedpaymentsimprovement.org/](https://fedpaymentsimprovement.org/)

[5] [https://www.swift.com/your-needs/instant-
payments](https://www.swift.com/your-needs/instant-payments)

[6]
[https://www.npr.org/templates/transcript/transcript.php?stor...](https://www.npr.org/templates/transcript/transcript.php?storyId=229224964)

~~~
chatmasta
Venmo has pretty strong network effects, to the point that its users use
“Venmo” as a verb. That will be tough to overcome.

~~~
giancarlostoro
Zelle is usable out of the box with Chase and Bank of America in the
respective banks apps (and I'm guessing other participating banks) it's kind
of a paypal for banks that just works.

~~~
chatmasta
That may be true, but it doesn’t mean customers are going to use it. The fact
that millions of 20-30 year olds in the USA tell each other “Venmo me” is
quite a bit of inertia to overcome.

Then again, perhaps Zelle will capture the non 20-30 demographic, which is
presumably quite large. Most 20-30 year olds have both their banking app(s)
and Venmo installed, whereas many in the 30+ demographic have only their
banking app.

In the 30+ demographic, Zelle is a new entrant to the “peer-to-peer payments”
market, and has a first-mover advantage. Since this demographic is not as
intimately familiar with p2p payments as the 20-30 demographic, Zelle has the
opportunity to concept of peer-to-peer payments. That is, Zelle has a clear
playing field in the battle for the “tipping-point” mindshare required to
solidify its first-mover advantage in certain markets.

It would be interesting to map the “real” human social graph, and then overlay
app usage onto it.

~~~
giancarlostoro
When we found out about Zelle (which our banks advertise) we switched to it
immediately (me and my fiancée) it involved no effort on our part, just maybe
telling them what our email was so other people can send us money by email.
The rest was handled by our banks. If venmo can be that frictionless then I
can see them taking over, but I wont bother installing venmo or giving it a
shot now. I'm more likely to paypal someone funds if they don't have Zelle or
Google Wallet.

I guess I fall somewhere in the 20-30 market though.

------
jedberg
The other day I learned that ACH transfers are going to become same-business-
day sometime around April this year. Not quite instant, but a lot better than
before.

Still doesn't hit the use case of cash on the weekend, but at least now the
American banking system is only 20 years behind Europe instead of 50 years...

~~~
vikascoder
And in India transfers are instantaneous within banks. Beats me why in the US
it takes 3 days.

~~~
jedberg
Because by making it a long time the bank can charge you $45 for a wire
transfer, which is instantaneous and can be for any amount.

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bouvin
Listening the HT Guys podcast earlier today highlighted that apparently your
transactions are not private by default—one of the hosts could inspect his
contacts’ dealings with impunity. In Denmark, we have MobilePay and it is
everywhere—I very rarely need to use cash to pay someone, and it certainly has
made sharing a restaurant bill a breeze.

~~~
cavanasm
When I used Venmo for the first time, I had this concern as well, but the cost
of the transaction is private to everyone outside of the parties involved (and
this isn't an options choice). I switched all my transactions to private,
personally, but the public by default nature of Venmo seems very intentional.
They're trying to create a social network like atmosphere around payments it
seems.

~~~
bpicolo
That only became true recently. Used to be public by default

~~~
anamexis
As far as I know, the transaction _amounts_ have never been visible by anyone
except the parties to the transaction.

~~~
bpicolo
You may be right, I coulda sworn it was showing amounts at some point in time

------
PTRFRLL
Free instant transfer was my favorite part of Square Cash, too bad they now
charge a 1% fee.

~~~
pbreit
I do not understand how same-day vs next day is such a big deal.

And 1% fee is like 400% annual percentage rate. Is that even legal?

~~~
xenity7
It’s not a loan, and the 1% fee isn’t an interest rate, so annualization
doesn’t make sense and usury laws don’t apply.

~~~
pbreit
Getting money today that you would normally get tomorrow is a loan. And
whatever you are charged is the interest rate.

~~~
whack
Usury laws prohibit interest rates >20%, because otherwise, there are people
who would actually be paying back 20% more than the amount they borrowed. In
your example, that's impossible - the additional "interest" you're going to
pay is never going to exceed 1% of the money you "borrowed"

------
Terretta
In 10 hours since post, no mention of Apple Pay Cash’s relatively frictionless
integration in Messages (iMessage), so adding a link:

[https://support.apple.com/en-us/HT207886](https://support.apple.com/en-
us/HT207886)

There’s no fee to use Apple Pay Cash with a debit card, and it’s as fast as
any other text message.

------
apearson
This is similar to what Google Wallet does right?

~~~
giancarlostoro
Used to do... Since they closed up Google Wallet. But yeah, it was easier to
transfer money through Google Wallet.

~~~
ezekg
Are you sure? I used Google Wallet a couple weeks back.

~~~
jkaplowitz
Can confirm, I've used Google Wallet multiple times recently, including last
night. My experience matches what they document here, except that I've never
personally seen the rare upper bounds for debit card transactions or for
sending via bank account:

[https://support.google.com/wallet/answer/6285486?hl=en](https://support.google.com/wallet/answer/6285486?hl=en)

There was some rebranding news recently; you may see them consolidate various
payment brands into the term Google Pay. But they're keeping their p2p payment
feature.

Disclosure: Although I used to work at Google, I don't now and have never
worked on their payment tech. I'm just a satisfied user who finds PayPal/Venmo
a shady enough company to avoid when decent alternatives exist to accomplish
the goal.

------
numbers
Facebook Cash does this for free and instantly.

~~~
bob_theslob646
The question is what is the true cost of transferring money and is Facebook
losing money every time it does it in order for users to get addicted to using
their service?

~~~
Spivak
I mean Google Wallet also xfers for free too with basically no strings
attached. Might as well take advantage of loss-leaders while they're around.

------
Larrikin
I wish the Zelle roll out wasn't so terrible. They need to release and market
a stand alone app and take away Venmos base. There's no need for PayPal to be
involved in my transactions.

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phusion
Despite all the negativity, as a filthy degenerate, I missed the previous
ability to get a Paypal debit card and instantly withdrawal money sent to my
PP acct with it. This should be useful..

------
jonbarker
Internationally?

------
mapgrep
Oh wow great, I can pay 25 cents to banks and a startup to do something that
was free and instant with cash and free and only mildly less instant with
paper checks.

Venmo, PayPal et al are great examples of how the big barriers to convenience
in our society are often fundamentally social and political, not technical.
The technology to enable two people with smartphones to exchange money is
trivial. Even the authentication bits can be made pretty trivial. But try and
hook this up to where people are obligated to keep their money (banks) and to
whom they must report their activities (governments, merchants, etc) and greed
and other externalities conspire to ELIMINATE any savings or other benefits
from the tech and actually make the situation MORE costly, less private, less
safe, etc.

Venmo can give me money instantly for 25 cents is about as exciting as
Facebook being able to replace my rolodex at the cost of lost privacy and
contentment which is about as exciting as ugly, hard-to-navigate, and
unlendable Kindle e-books being able to replace actual books from real
publishers.

~~~
austenallred
> to do something that was free and instant with cash and free and only mildly
> less instant with paper checks.

Running down to the bank to cash a check is pretty damn far away from "free
and instant."

~~~
closeparen
No, but “write out a paper check and have the other person photograph it with
their bank’s app” is still the only universal and free peer to peer electronic
payment method in the US.

(Cash requires trips to the teller window during banking hours if your
transactions are not all multiples of $20).

~~~
otakucode
Will most banks actually allow that? Taking a picture of a personal check and
cashing it instantly? In my experience banks treat personal checks like
radioactive waste and getting a bank to cash a check as an individual takes
some doing. Last time I had a $2600 check I found out that for any check over
$2500, I had to physically take it to the bank and they wanted to know why I
was receiving the money.

Anything that cuts payment processors out of the loop is absolutely essential
in my book. The current scenario is that the majority of our economy flows
through a few payment processor companies who do nothing of value beyond
moving numbers down a wire, and they charge a percentage cut for that (because
apparently it costs them more to move larger numbers?). That amounts to them
being a taxing body. It gives them tremendous control over our entire economy.
If we don't tear them out of that position, they will counter-act any actions
taken by the government to control the money supply if the government ever
dares to do anything which would not maximize the payment processors profit.

~~~
tonyarkles
In Canada they certainly didn't mind for me. When clients were sending me
cheques, I don't think I ever ran into any problems cashing them using the RBC
"Photo of a cheque" thing.

I ran into way more difficulties with Quickbooks Payments accepting large
credit card transactions. There were invisible thresholds that seemed to
trigger Know-Your-Customer (KYC) rules, and the fact that those had been
triggered seemed to be opaque to Tier 1 support. As far as everyone I talked
to (at both QB and at RBC) the money had vanished into the aether, until a
couple days later I got a call from someone in the QB Compliance department
who had a few questions.

