FiServ ZashPay Should Gain Rapid Consumer Acceptance

US vendor Fiserv is previewing a new person-to-person payments product called ZashPay that lets users send money directly from their bank accounts to anyone they know using only an e-mail address or mobile phone number.

This sounds like a Paypal widget embedded in a bank’s website. There’s no doubt that, like Paypal, ZashPay will become popular among consumers, but the question is, how many banks will let out their web real estate to a tenant like Paypal.

Whether it’s ACH or Expedited Payments in the US, FPS or BACS in the UK, SCT and SDD in Europe, or NEFT in India, electronic person-to-person retail payment solutions currently offered by banks require the sender of the payment to know the intended receiver’s bank account number, sort code and other information. Even assuming most senders are able to obtain such information, they need to ensure that they enter them accurately into into the funds transfer screen of the bank’s website. If they make a mistake during this process, the money could end up in the wrong account and they are held solely responsible. Do they get any help from the bank’s website while entering the information? No. I haven’t come across a single bank system that verifies the information and gives a green light to the sender that the entered combination of account name and sort code indeed belongs to the intended receiver.

In the absence of such an assurance from the bank, most people are bound to face an anxiety with such e-payment methods, especially when they don’t need to know anything other than the receiver’s name when using the alternative of paying by cheque. This is  likely to stunt the mass adoption of eP2P products, which might be borne out by banks monitoring “abandonment rates” on their eP2P transaction screens.

Under the situation, FiServ’s ZashPay sounds great. By asking the sender to only enter readily available information like the recipient’s email address or mobile phone number, it delivers peace of mind to senders and removes one of the most severe areas of friction that afflicts all present bank-offered eP2P solutions. By combining convenience with security, it should gain rapid acceptance among customers of banks. However, since it has the potential to cannibalize the use of alternative fee-generating products already offered by banks, it remains to be seen if FiServ can gain widespread adoption among banks. 


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