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U.S. Bank gets first-mover advantage with real-time person-to-person payments


Launching real-time P2P payments through Fiserv’s Popmoney service, U.S. Bank’s payment handling time has been expedited from standard speed — which can take up to three days to clear — to next-day delivery, with fees contingent on transaction size and receipt time frame.

“Real-time for us has been not the end, but a next step to adding speed to mobile transactions,” said Niti Badarinath, senior vice president of mobile banking and payments, at U.S. Bank, Minneapolis.

“Customers who use mobile to access commerce or banking expect things to happen quickly with instant gratification,” he said. “When you marry that, the capabilities are getting better and better.”

Fast cash
The instant payment option uses the real-time payment service add-on module for the PEP+ solution from Fiserv, which facilitates real-time payments via a direct connection to a bank’s core processing platform or DDA accounts.

U.S. Bank’s partnership allows it to be upfront with the seemingly universal turn to mobile and social networking, and presents a natural progression to add more speed to transactions.

In correlation, U.S. Bank customers can also now attach and send virtual ecards to payments for celebratory occasions like birthdays, graduations or holidays, making the gift of money more personable. Users can also request or receive money using someone else’s name, account number, email or mobile phone number.

Mr. Badarinath recognizes the fact that consumers are beginning to expect the delivery of anything on the same day.

Instant action influencing banking habits is undoubtedly related to online shopping trends and the immediate availability of merchandise from digital stores and services.

Real-time action
The real-time initiative, though crucial to consumers, is void in many banking institutions.

U.S. Bank is complementing its money transfer capabilities by also exploring the use of real-time in its marketing tactics, such as offering customers the opportunity to use reward points on a recent purchase.

“We don’t have too much data yet to project real-time usage adoption, but if we step back we forecast three things,” Mr. Badarinath said, “How many people use it, how big transactions are, and how many transactions are being completed.”

“We’ve found that people are comfortable using the service, as they’ve exceeded expectations,” he said. “We’re seeing higher usage of money being sent into an account, we predicted it to be out of our three at best.”

“The size of transactions, we anticipated to be very social, but its larger than we thought. So we find people love person-to-person payments and use it to pay rent and a whole host other things we weren’t expecting.”

Final Take:
Michelle is editorial assistant on Mobile Commerce Daily, New York