Person-to-person payments (P2P) is a technology service that enables you to “send” money from your checking account or credit card to another person’s account via the Internet or a mobile phone.
This capability has been around for a long time. For example, Paypal customers set-up their checking account or credit card information to be used to send a payment. Using Paypal’s website or mobile app, recipients complete the process of receiving funds. Users are generally identified by their email address and can send funds to Paypal customer. The downside to Paypal is that both senders and receivers must register an account – which can take a few days and is a multi-step process.
In the second method, customers use an online interface or mobile application to “send” money to a recipient’s email address or mobile phone number. The recipient then receives a notification to use the online interface to input his or her bank account information and routing number to accept the transfer of funds. In this method, recipients do not need to have an account with the sender’s bank or credit to receive a money transfer.
Many banks provide P2P in their online interfaces and mobile apps. Many institutions do not charge any fees to use the service. Some charge fees to expedite the payment and some also charge transaction fees to use the service. Enter your zip code to search for a bank or credit union that suits you best and we’ll let you know whether they offer P2P and if they charge any fees for the service.