SAN JOSE, Calif.-In what amounts to a growing trend, Technology Credit Union has joined the person-to-person payment service arena with SendMoney, an initiative supported by PayPal.
In 2012, Javelin Strategy & Research released research that estimated consumers had transferred more than $195 billion in 2011 using online, mobile and other electronic channels. The figure for 2012 is expected to be even higher.
Market indicators like this are not lost on Tech CU's Chief Banking Officer, Joe Anzalone."This person-to-person service is a necessity and we are very committed to it. We are always looking to be ahead of the innovation curve and have had a long-term relationship with PayPal for many years, so this made sense."
With $1.5 billion in assets and 276 employees, many of Tech CU's 69,000 members are foreign nationals or travel internationally, which further supported the choice to partner with PayPal, a 24-hour, seven-day-a-week secure payment option. "Last year, we really expanded our efforts in mobile banking and PayPal has a branded, trusted name and is available in 60 countries," said Anzalone.
Tech CU Product Manager David Green explained that SendMoney is easily adaptable and convenient. Members sign into their online or mobile bank account as per usual. Next they enter the receipt's contact information (i.e., phone number or e-mail address), select an amount and the funds are immediately transferred to their PayPal account.
One Slight Catch
There is a slight catch, though. For example, the recipient of funds has to have a PayPal account; however, the sender does not need a PayPal account to make the transfer.
"Since we launched, we have had several hundred transactions and it continues to grow every day, especially since we launched a promotion that has brought more visibility to our members," said Green, adding that due to its Silicon Valley location most members have technical backgrounds, which increases adoption rates.
For Tech CU, the benefit of partnering with PayPal is that most people consider it safe, secure and generally understand the concept, whether or not they have an account. Despite industry credibility, and to ensure the partnership would be a success, the credit union conducted beta testing.
"Our testing was carefully orchestrated. We first had a small group testing it, which included the project and product manager and then we rolled it out to our project team comprised of roughly 20 people," said Green. "Next we rolled it out to our entire employee base just to make sure nothing was wrong. And even after we rolled it out to members, we didn't promote it for a few months. Some members found it on their own and used it. We took data from there as well until we were 100% confident."
While recipients have to open an account to receive funds, members making the transfer are charged a fee, explained Anzalone.
"This is not a huge money maker and is less expensive and cheaper than a domestic wire transfer. Members were asking for the service." Green added, "We are charging 39 cents per transaction. In what I have seen in the market place, this service can cost as much as one dollar per transaction and there are others who do not charge at all."
Since the official rollout in December 2012, there has been approximately $50,000 in transfers. Moving forward, Tech CU is taking "wait-and-see approach" before making any additional adjustments. "The metrics we are seeing are very encouraging. The numbers look good and we have had positive feedback from PayPal and members," said Anzalone. "We are going to let the evolution of SendMoney take its own course."