May 7, 2024
Why Your Credit Union Needs P2P
Access to Peer-to-peer payments (P2P) from one’s financial institution has become an expectation of many bank customers and credit union members. Not providing P2P to your members could lead to them banking elsewhere, but that’s not the only reason why your credit union needs P2P.
What is P2P? Understanding Peer-to-Peer Basics.
P2P stands for “peer-to-peer” payments. These “money transfer apps,” such as Venmo, Apply Pay, or PayPal, allow members to send money directly to another person from their mobile device via a linked financial account or card.
To send a P2P payment, a sender needs to know very little about the receiver – they do not need to know the recipient’s personal banking information. Typically, all the sender needs is a receiver’s email address, phone number, or username, and funds can be on their way! Depending on the service, P2P funds can arrive instantly, within minutes, or within 1-3 business days.
While P2P functions the same no matter the payment service, some P2P services vary in how you access and use them. For example, some services have their own apps, while others are integrated directly into a bank or credit union’s app or website. Some services require both the sender and receiver to set up a P2P account, while others do not. Regardless, though, P2P allows individuals to rapidly send funds to another individual while keeping their bank account information safe and private.
Is P2P safe and secure?
Safety and security are hot topics in the payment world, and P2P services are typically quite safe. All major P2P systems will encrypt and/or shield financial information. Many P2P services require users to create a PIN to complete a transaction or utilize 2FA before allowing access to the service.
That does not mean, though, that hacking or scamming won’t occur. Scammers are frequently using P2P services because it’s hard for the sender to get their money back when authorizing a false payment to a scammer (banks and credit unions are not responsible when money is sent and lost in a P2P scam). As an FI offering P2P, it is important to teach your members preventative measures so they can be on the lookout for P2P scams.
How many people are using P2P?
An overwhelming number of Americans are utilizing P2P payments – with almost 160 million who were estimated to have made a P2P transaction in 2023. And while even frequent users aren’t using P2P payments daily, Forbes reported 42% of surveyed American adults used a service in the past week, with 60% using it in the past month.
Why should my credit union offer P2P?
Those numbers do not lie – and with that said, it is easy to infer that your current membership wants to use P2P! If you do not provide these services, members may get them from somewhere else. What is the problem with that, you might ask? Well, if a member decides they want to consolidate their financial accounts, they won’t leave the financial institution that provides all the features they want.
Additionally, providing a P2P feature directly through your core processor is more secure than using an outside app such as Venmo. When a member uses a credit union P2P, potential fraud can be spotted and negated more efficiently.
Your focus is not just on current membership either – it is also on prospects. Staying up to date with technology and popular features is a primary way to gain new members, especially millennials and Gen Zers. Adding this and other innovative features to your credit union’s already member-centric “people helping people” motto is a surefire way to attract prospective members.
Neural Payments & Sharetec
Sharetec offers embedded P2P functionality via Neural Payments, providing easy, secure P2P without needing to log in to a third-party app. Funds can be sent anywhere, anytime, via a seamless out-of-network experience.
Offering P2P payments directly within digital banking makes it easy for consumers to send money outside of their ecosystem. The front-end user can send money effortlessly, and the receiver has the power to choose where they want their money to go.
Benefits of Neural Payments
With the Neural Payments P2P open-loop systems, your credit union can move money on traditional debit rails, modern fintech, and real-time payment rails – including third-party digital wallets and accounts tied to debit cards. It gives your credit union the ability to send money anywhere without heavy data-sharing requirements or additional settlement processes to learn.
User-Friendly & Quick
Your members can transfer funds instantly without coordinating apps with receivers since it’s a sender-driven system! Neural Payments breaks down the walls of the director, as they have greatly simplified the off-network experience for those not using Neural Payments. Senders can send money outside the NP ecosystem to users of third-party apps and account holders. With just a few clicks, receivers who are not using Neural Payments can decide where they want their money to go. They do not need to download an app or enter in credentials.
Cost-Effective
Your credit union can attract a new market of non-institutional members via digital channels to reduce costs. Neural Payments can also reduce check processing expenses by replacing 70% of checks!
Growth Potential
P2P capabilities allow your CU to draw deposits back into its ecosystem.
More Secure
Neural Payments utilizes a proprietary rules-based fraud monitoring platform that mitigates P2P fraud and eliminates the need for cardholders to register their cards to send a receive money, greatly reducing the risk of fraud.
Is your credit union ready to offer a white-label, brandable P2P product to its membership? Then contact your Account Manager for more information today!