Person-to-Person Payments: A Convenient Way to Send Money
If you have a smartphone, computer or mobile device, you can send money to friends and family with just a few clicks or taps on your screen. Financial institutions like Calumet Bank are developing partnerships with person-to-person payment services to let you securely send funds using mobile and online banking technology.
When you use your bank’s person-to-person payment service, you don’t have to worry about bringing cash to split the bill at a restaurant, or remembering to write a check for a coworker’s fundraiser. Here’s an overview of how these services work.
What you’ll need
You’ll need to have a personal checking or money market account at a bank that has a partnership with a money transfer company. The account would also need to be registered for online banking as the majority of these transfers would be made via mobile devices.
Next, you’ll need the phone number or email address of the person you want to send money to. You could also set up a transfer if you have that person’s bank account number.
How to transfer money
To send funds, log into your bank account online and go to the page that lets you enter external transfers. From there, select your bank’s money transfer service — Popmoney, for example — and enter the contact person’s name, the amount you plan to take out of your account, and the date you’d like to send the funds.
When you submit the transfer request, the recipient will receive a note with instructions on how to claim the funds in their bank account. The person generally has about 10 days to accept payment.
When the money is accepted, the funds can be in the recipient’s account as early as the next business day if you’re taking the money from your debit card and three business days if the money comes from your bank account. Some institutions like Calumet Bank will allow a standard delivery option of 3 business days at no cost, or you can opt to have next business day delivery for a nominal charge regardless from where you’re moving the funds. Recipients could also choose to accept payments automatically by signing up for an auto deposit feature.
If the payment isn’t accepted within the 10-day time frame, the funds are refunded to you.
You can also use person-to-person transfer services to ask others for payments. Submit a request, and the recipient receives directions on how to send payment.
Money transfer companies that partner with banks usually charge the sender about a dollar per transaction. There may also be transfer limits of about $2,000 a day. The fee is generally cheaper than the cost of a wire transfer, which is more commonly used to send money abroad.
If someone uses a person-to-person payment service to request money from you, that person will be required to pay the fee: You usually won’t be charged a transaction fee to send the money.
Ways to keep person-to-person payments secure
Before you hit send on a money transfer, you’ll want to take steps to make sure your transaction is secure.
- Use an online personal identification code (PIN) that’s unique and hard for someone else to figure out.
- Regularly check your account online for unauthorized transactions.
- Contact your bank to learn about its online security safeguards.
Person-to-person money transfer services can let you securely send money to family, friends and colleagues. By using online payment technology, you can reduce the need to carry checkbooks and excess cash, and streamline your overall banking experience.
Margarette Burnette, NerdWallet
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With Calumet Bank and the Insured Cash Sweep® (ICS) service, you can earn interest on private funds placed into money market deposit accounts and have a peace of mind knowing that your ICS funds are eligible for multi-million-dollar FDIC insurance.
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