Fintech Changes Consumer Payments
Never carry cash again
Money transfer has been revolutionized by several fintech services. Transfers between friends and family do not revolve around cash any more. Services allow transfers directly from a bank account into another account down to the cent. Yet, other services make payments easier for basic transfers, restaurant payments, or even gift cards.
Pay Friends and Family
Location: New York, NY and San Francisco, CA
CEO: Andrew Kortina and Iqram Magdon-Ismail (Co-Founders)
Capital Raised: (Acquired by Braintree and then PayPal)
Venmo is a peer-to-peer payment system that is widely used. It essentially eliminates the need for cash as you can send money or request money from anyone with a Venmo account. Venmo has a 3% fee for credit cards and non-major debit cards.
Square Cash (From Square)
Square Cash is a recent addition to Square’s services. Like Venmo, it allows users to pay directly into another user’s account. There are slight differences, however. When you receive money via Venmo, you have to cash out manually and it takes a few business days for the cash to be added to your account. Square Cash skips this step and directly deposits the cash.
Dwolla is another software that allows users to send and request money. Unlike Venmo and Square Cash, Dwolla has a maximum transaction cost of 25 cents. Dwolla was founded in 2008, so it has been around longer than its competitors.
Google Wallet (From Google)
Google Wallet has a lot of the same functionalities as other peer-to-peer payment systems, but it is a little bit more expansive. You can pay to vendors or anyone with a Gmail account. Some stores also have a “tap and pay” function where you can use an android phone to “tap and pay” quickly.
PayPal is one of the most well-known payment services. It was acquired by eBay in 2002. PayPal was one of the first money transfer systems that made moving money online very easy. They make money from charging a fee for retailers and online vendors.
Circle allows users to transfer cash or Bitcoin. The transfer of Bitcoin separates Circle from the rest of its competitors. Circle is looking to make an impact in Chinese markets by empowering consumers with transfer tools since banks cannot directly handle transactions.
Coinbase is a safe, easy to use Bitcoin wallet, which allows those who are both experienced and inexperienced with the currency to get involved. They charge a 1% exchange fee, but transfers are free. These wallets will only continue to succeed, as Bitcoin becomes less of a novelty and more of an accepted popular currency.
Split the Bill
Splitwise makes IOU’s more organized and painless as possible. Keep track of how much money you owe or how much money you’re owed. Splitwise will send reminders to pay back what you owe. Splitwise is adding in another way to simplify personal finance by making payments easier as a group.
Pay with a gift card on your Phone
Users can buy unused gift card credit for cheap and also sell gift card credit on this online marketplace. Raise is making gift cards much simpler and more relevant to use. They use a sleek mobile app to keep track of users’ credits.
Gyft, like Raise is trying to make gift cards easily accessible and more relevant. It is much more convenient to store cards and credit on a mobile wallet rather than have physical cards with an unclear amount of credit. Gyft was acquired by First Data, who has the resources to expand usage of virtual prepaid.
Pay at Restaurants with your Phone
Reserve makes dining more convenient as it combines the functionality of dining information and payment. The mobile platform makes it easy for customers by allowing users to split checks and make dining out faster.
TabbedOut makes the restaurant bills a thing of the past. Users can quickly pay at their convenience and avoid any kind of miscommunication that might occur with a traditional bill. TabbedOut also strongly emphasizes their perks and rewards that come with using their service.
Like TabbedOut, Dash allows users to split checks and pay for their bill quickly. Dash is mainly available in larger cities so its usage is slightly limited. Dash also passes along information about the restaurant so that users can make informed decisions on where to eat.
Cover is another way of paying the bill via mobile device. It can split the check and pay the bill for restaurants that accept Cover. Cover does boast a simpler check-out flow than its competitors like TabbedOut.
Plates (From SplitWise)
Plates, born out of a “Hackathon”, is a payment service directed towards paying the bill at restaurants. It can be integrated with the Splitwise “IOU” service as well. It uses a unique visual mobile design, which is easy to understand and use with friends. Figuring out tax, tips, and splitting appetizers is made simple.
OpenTable simplifies the process of reserving a table for dining out. You no longer have to call the restaurant and wait to find out available times. Instead you can just see when tables large enough for your group are available and then reserve a table right away.
California Fintech Network is a non-profit trade organization for professionals, founders, executives, and investors that work in financial technology. Find more detailed research at www.CaliforniaFintech.org