PayPal shakes up peer-to-peer mobile payments with URL-based system
PayPal Canada is rolling out a new payments platform titled PayPal.Me that enables users to send a personalized URL link to friends and family via their mobile device to collect on IOUs and avoid money hassles with owed payments.
The peer-to-peer solution will allow Canadian consumers to send the link via text messages, instant messenger, email and social media platforms to collect on debts. After the money is paid, the sum will be deposited into the consumer’s PayPal account, eliminating any difficult conversations and mishaps with transferring funds.
“PayPal understands there is a hidden discomfort in IOUs between friends and families,” said Kerry Reynolds, head of consumer marketing at PayPal Canada. “A PayPal Money Habits Study reveals that people are collectively owed over $51 billion (U.S.) in unpaid small debts from friends and family.
“That’s why, PayPal is bringing people a better peer-to-peer (P2P) payment experience by making it very simple to pay and get paid back across the globe — wherever the conversation is happening — whether it’s via email or a group chat,” she said.
“Unlike other peer-to-peer payment services, PayPal.Me is instantly available to consumers and businesses in a total of 18 countries. Canadians can use their personalized PayPal.Me link to split travel or group gift costs with their family and friends who live overseas.”
PayPal’s acknowledgment of the awkwardness that accompanies conversations about money prompted the company to introduce PayPal.Me to the Canadian market. Consumers seeking to collect funds can visit paypal.me on their mobile devices to sign into their account and get started.
Once they have retrieved their unique URL link, they may text, email, instant message or post it to friends, family and coworkers via any Internet-enabled device. Recipients must click the link, enter the amount owed and see the money instantly get transferred to the PayPal account of the person they are paying.
Consumers in Canada may send money free of charge when using funds from their bank account or PayPal balance. A small fee will accompany transactions made via credit card or Visa debit card.
PayPal believes this will remove the stress of claiming money from several people at once. This service may come in handy when splitting the bill with friends over a round of drinks, or collecting donations for a child’s sports team.
IOUs have been shown to cause severe distress among friends and family, but digital payments are aiming to combat that sentiment.
“The PayPal Money Habits Study showed that 30 percent of Canadians have lost a friend or relationship over unpaid IOUs and on average we are owed $462 in unpaid debts,” Ms. Reynolds said. “A driving reason appears to be discomfort around financial conversations, as more than more than 53 per cent of Canadians find it awkward to ask their friends or family to pay them back.”
No unnoticed debts
Nearly 50 percent of people surveyed do not get paid back from their friends and family as a result of discomfort surrounding IOUs. However, the lack of these conversations can culminate in serious social and fiscal consequences, a threat which may drive future adoption of P2P payment services.
PayPal has also been foraying into a slew of other options in the mobile space.
With the company’s mobile payments transactions volume increasing 40 percent year-over-year, the business revealed in April that it is testing NFC payments prior to its imminent split from eBay (see story).
Last month, Shell began its rollout of the PayPal-enabled Fill Up and Go service across gas stations in Britain, which allow customers to download the Shell Motorist application and scan a QR code to pay at the pump with their smartphones (see story).
PayPal understands that mobile payments have cemented themselves in many users’ lives, and their trajectory will continue skyrocketing as the year progresses.
“P2P usage is becoming widespread across the globe,” Ms. Reynolds said. “People dislike carrying cash, and peer-to-peer payments serves as a convenient and ‘liberating’ option.
“According to our PayPal Money Habits Study, 16 percent of Canadian participants prefer using P2P payments over checks, bank transfers or cash to pay back debts or get reimbursed, and 76 percent report feeling relief at using P2P payments,” she said.
“The future for mobile payments is bright, with 42 percent of Canadian millennials saying they are embracing P2P payments. Millennials are eager for more mobile overall, as 42 percent would prefer to pay via mobile whenever possible.”
Alex Samuely, editorial assistant on Mobile Commerce Daily, New York