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ELI5 P2P payments: explain like I'm 5, person to person payments

Posted: Sat May 23, 2020 5:28 pm
by heartwood
My title is partially a nod to my not knowing the ELI5 acronym a week ago. So is p2p egged on by the eli5 usage. My main acronym is YMMV: your mileage may vary. I don't know any, not one, ticker symbols. I don't generally google acronyms I don't know.

I'd like to pay someone coming to the house without using cash or check. I've heard of Google Pay, Zelle, and others. I've read I use my bank, enter their email or phone and the amount and its done!

But what happens then? They get an email or text? How do they get their money? Do they need an app? Do they need to link an account?

We recently received a $20+/- paypal payment. I either had to use it in a paypal transaction, or link a bank account, or pay a fee for a 1x payment to me, or pay $1.50 for mailing me a paper check. Rather than link an account I paid the $1.50. Doesn't seem like an improvement over writing a check. I still have to deposit it and I have to pay for that privilege.

I already have a Google Pay account (not sure why) and my checking account at BOA tells me I have zelle. So ELI5, how does this work for the recipient?

Re: ELI5 P2P payments: explain like I'm 5, person to person payments

Posted: Sat May 23, 2020 5:52 pm
by runner3081
For Zelle, I receive an email and it goes right into my bank account at Ally. I prefer that over PayPal.

Re: ELI5 P2P payments: explain like I'm 5, person to person payments

Posted: Sat May 23, 2020 6:06 pm
by eigenperson
I only use Google Pay, but I can tell you how that one works.

You can send money to anyone if you know their email or phone number (if phone, it must be able to receive text messages). There is a limit of $10,000. If you send to their email, they will get an email with instructions. If you send to their phone, they will get a text message with instructions.

If you aren't sending to a Google account, the instructions will tell them to either create a Google account, or to link an existing one to their email/phone number. Once they have linked a Google account, they can claim the money to a debit card or bank account. Google charges no fee and I have never heard of a bank charging fees for this. If they don't claim it within some period of time (I forget how long -- maybe 2 weeks?) the transaction gets canceled. Once you have linked a bank account or debit card, further transfers will automatically be claimed in the future -- no need to do anything.

I greatly prefer it to writing a check. There are too many downsides of checks -- they can be lost or stolen, they have your personally identifying information and account number printed on them, the recipient can choose not to cash them (or forget to cash them) for months or years... the list is long.

Re: ELI5 P2P payments: explain like I'm 5, person to person payments

Posted: Sat May 23, 2020 10:49 pm
by Cubicle
+1 for Zelle. I feel, maybe unfoundedly, most secure with Zelle as it is a product of the big banks. As opposed to a 3rd party product from Square, PayPal, etc... No fees, usually instant.

The Zelle recipient gets a notification money has been deposited into their account. Text or email.

Re: ELI5 P2P payments: explain like I'm 5, person to person payments

Posted: Sun May 24, 2020 11:11 am
by 2babogle
Cubicle wrote:
Sat May 23, 2020 10:49 pm
+1 for Zelle. I feel, maybe unfoundedly, most secure with Zelle as it is a product of the big banks. As opposed to a 3rd party product from Square, PayPal, etc... No fees, usually instant.

The Zelle recipient gets a notification money has been deposited into their account. Text or email.
+1 for zelle. However, it's for sending money to people your know. There's no recourse or disputing. If you're buying something from someone you don't know, even zelle says it's not the right service. Cash is king there, or PayPal I suppose.
I still use zelle in those situations but when I'm holding the item I'm buying and am still standing next to the seller or buyer...

Re: ELI5 P2P payments: explain like I'm 5, person to person payments

Posted: Sun May 24, 2020 2:52 pm
by heartwood
I think I get it now. I'm thinking I should ask the person I'm paying if they're using a particular service. As mentioned, I've got both zello and google pay. it's not a large amount, $30 - $40. I can always do a check or cash. I don't want to give them extra work to setup a new account linkage for that level of payment.

Thanks to all.