Popmoneya simple and secure way to exchange money

Secondary Research ReportMarisa Pecoraro, Lily Grant

Lydia Saggu, Emma Dougherty

(Popmoney, 2016)

History

About Fiserv

Fiserv was founded in 1984 via the merger of First Data Processing and

Sunshine State Systems (Fiserv, 2013). Fiserv not only functions as an

information management company, it is also an electronic commerce systems for

the financial service industry (PRSSA, 2014).  This type of business helps

consumers and businesses learn how to manage money beyond the typical

realm of a bank with hard money. This is a growing market, and Fiserv has

expanded their reach to 13,000 clients and 22,000 associates worldwide. With

this huge clientele, Fiserv moves over $1 Trillion every year (Fiserv 2016). Fiserv

is not only growing in the realm of mobile and online banking, it also has been

expanding in the realm of mobile transactions among consumers. This growth is

represented by the 20 billion digital transactions (Fiserv, 2016). Furthermore, this

development is statistically represented through the 55 million people who use

Fiserv-powered online banking (PRSSA, 2014).

Fiserv’s Accomplishments

        Fiserv has a history of business and information management. It has

divided these services into five main categories. “Customer & Channel

Management” is about creating and keeping customers and improving the

company’s retention rate and customer loyalty (Fiserv, 2016). “Insights &

Optimization” was created to help businesses achieve maximum potential out of

data (Fiserv, 2016). “Payments” through Fiserv is a program/service that uses

Fiserv’s money management and payment functions, but also will assist

companies with outsourced payment solutions to help make a more efficient

process for the customers (Fiserv, 2016). “Processing Services” works with the

‘invisible’ money management transactions, for example the “account to account”

transactions (Fiserv, 2016).  “Risk & Compliance” is the final group of services

that Fiserv offers; Fiserv offers multiple methods for risk management and has

systems to “safeguard [companies’] reputations” (Fiserv, 2016).  Fiserv is

specialized in many fields and disciplines in regards to information and business

management and monetary transactions. Within the previously listed sections

Fiserv has an array of specific services and products like Mobilitie, CheckFree

RXP, CUnify, Precision, Corillian Online (ASP), Credit Union Platforms, DNA,

Source Capture Solutions, Retirement Illustrator, and more (Fiserv, 2016).

Fiserv’s Goal

Fiserv is looking to expand the reach of their financial services by entering

the territory of money exchanging apps. A field that is ripe with competition,

Fiserv wants to add their own solution for quick transaction and banking with the

creation of Popmoney.

Product

        Popmoney is a service created in the past few years by Fiserv; the app is

a mobile banking/transaction app that allows for “easier and more secure ways to

send and receive money… consumers can send or request payments directly

from their online or mobile banking service” (Fiserv, 2016).  This product uses

existing checking or savings accounts but is trying to distinguish itself from the

other transaction apps by allowing people to use their phone number, email, or

bank account for exchanges. The multitude of access points allows for easier

and quicker exchanges (Popmoney, 2016). It differs from some of the

competition because it requires $0.95 transaction fee and can take a minimum of

one business day to process transactions. Popmoney is offering a more secure

platform with the help of their parent companies, which specialize in monetary

exchange and management (Popmoney, 2016).  This app works with 1,900

different banks and credit unions and is available through the Google Play Store

or the Apple Store (Popmoney, 2016).

Market Analysis

        Fiserv is one of the leading providers of information management and

electronic commerce systems in the financial service industry (Fiserv, 2014).

Over the past decade mobile technology has become an integral part of society

and banking operations. Fiserv, along with multiple other companies, recognized

this mobile shift and capitalized on the opportunity by creating mobile banking

and person-to-person payment services.

When the online banking industry was emerging applications only allowed

users to make payments less than two hundred dollars. However, today

consumers and businesses are able to make large and recurring payments

through these applications (Plunkett, 2016).  A study conducted by Pew

Charitable Trusts in May 2015 found that only 22% of American consumers have

used their mobile device to send or receive money (WSJ, 2016), this statistic

demonstrates that the mobile-banking industry is untapped. Since 2014 Paypal’s

person-to-person banking service, Venmo, has experienced a 175% increase

(WSJ, 2016). The exponential growth seen by PayPal and the small percentage

of consumers that are aware of these services show that the mobile-banking

industry is just beginning to expand.

The environment these mobile-banking applications are operating in is

highly competitive and are rapidly changing. Internationally, mobile banking has a

stronger presence and a higher adoption rate than in the United States. Only 10

percent of U.S. bank consumers use mobile banking (NYTimes, 2010). The

meniscal amount of mobile bankers in the United States in relation to the amount

of smartphone users further reiterates the potential in this industry. Companies

are recognizing this emerging market and are responding (Mobile Banking and

Payment Revolution, 2013).

PayPal was the first corporation to capitalize on mobile banking; PayPal

began in 1998 and has since become the most dominant player in the person-to-

person electronic payment network. PayPal the parent company to Venmo, a

person-to-person banking application, allows Android and iOS users to send and

receive money for free. Venmo is one of the more social banking applications

because it is integrated with users Facebook and phone contacts. Square Cash

allows users to send money to an email address, the company partnered with

Snapchat to allow users to send payments via Snapchat; with Square Cash

users do not need an account, they only need a debit card. Square Cash only

charges a person if they are using the business version of their service, in which

case it is a 1.5% transaction fee. Dwolla allows users to send money to anyone

with an email, phone number or Dwolla account. Dwolla is targeted more at

business because it allows mass and recurring payments to be made

(TheSimpleDollar, 2016).

        These corporations have promoted their service in various ways

throughout the expansion of person-to-person mobile banking. Venmo is about to

launch its first major campaign over multiple media platforms; the campaign is

targeted at the millennial generation (Fortune, 2016).  Dwolla used social media

to generate brand awareness and promote the service through word of mouth.

The company primarily used Twitter to build an audience by sending Twitter

users who tagged them one dollar and later encouraged people to offer input on

their website in exchange for one dollar (Entrepreneur, 2011).  Square Cash has

targeted their services towards business owners and non-profit organizations;

they have done most of their promotion through information television

commercials (Square.com, 2016).

Target Audience

Definition

A target audience is the audience that the product is intended for. It is a

specific group of consumers that the market plan has chosen to focus on. It is

highly important to perform a target audience profile during situational analyses

in order to properly identify all possible target audiences, and create the best

possible campaign strategies that will gain the target’s attention and business.

Primary Target Audience

About “55 million people already use Fiserv-powered online banking

services” (Popmoney.com). Popmoney’s primary target audience focuses on

consumers between the ages of 18 and 24 (millennials) who would most likely be

lending or sharing money with their acquaintances. Including but not limited to

college students, and working young adults who have disposable income and

young couples who are non-fund-sharing that would find the services Popmoney

provides useful (PRSSA).

Secondary Target Audience

Popmoney’s secondary target audience is people that are the most likely

to exchange money with such as parents or other family members they are close

to, roommates, and friends (PRSSA). They may exchange money with family

members for birthday or Christmas presents, sending money to children away at

college, roommates’ rent and bills, and friends, if they, for example, shared a

pizza and want to split the price evenly. Parents could also use Popmoney to pay

younger children’s tutor bills, or tp collect dues for soccer teams (Popmoney fact

sheet). These types of secondary audiences would most likely be in a close

vicinity to the primary audience.

Additional Possible Target Audiences

An additional audience that could be considered is people who run small

businesses. It can enable them to send invoices and receive payments as small

service providers conveniently and affordably. Popmoney makes it very simple

for small businesses to exchange money, which eliminates the tediousness of

sending paper invoices and checks (Popmoney fact sheet).

Another additional audience to target could be the banks themselves.

There are already almost 2,000 banks participating such as Citibank, PNC,

SunTrust, and more using Popmoney as an online service through apps on the

iPhone and Android devices, but there are more banks and credit unions that the

primary target audience is associated with that Popmoney could link with in order

to reach a larger target audience.

Importance

        It is important to target these certain audiences because they all intertwine

with each other as audiences. If we target banks and small businesses, then

people are more likely to be introduced to Popmoney and will use it for person-to-

person payments. The Primary target audience is extremely important to target

because millenials with these circumstances are much more likely to use

Popmoney as a regular choice for transferring money electronically. Millenials

are already used to mobile and online platforms, so things that are quick and

convenient tend to appeal to them, making them the perfect target audience for a

product such as Popmoney.

Research

The following is research done by Nielsen explaining the differences in

online and mobile banking habits between baby boomers and millenials. This

shows that millenials are the right target audience because they are much more

likely to use the channel on mobile banking that Popmoney uses.

       

Challenges

Popmoney faces many issues establishing itself because it is a pioneer of

a new market frontier, and it has competitors who are offering the same product

with different benefits that may be conceived as better.

Competitors (Time)

Venmo

Verse

Dwolla

Pay Pal

Square Cash

Google Wallet

Payments in Facebook Messenger

clearXchange

Fee

Popmoney charges a $0.95 fee every time a user requests money or

sends money. This feature is its biggest drawback, because Popmoney’s

competitors offer the same service, but without any fees. People are more likely

to choose a free service like Venmo, because it doesn’t make sense for them to

pay for a service if they don’t have to.

Brand Recognition

Popmoney is not a well-known service. Its competitors are better-known. It

is available for many people through their banks, but “it is typically presented as

a feature within online or mobile banking and is not always prominently

displayed” (PRSSA). If Fiserv wants Popmoney to succeed as a service, it needs

to find a way to distinguish itself in the faces of its competitors, and become a

top-of-mind personal payment service.

Resistance Against Change

People are used to exchanging paper money and writing checks. Many

people enjoy the satisfaction of physically giving and receiving money and

knowing for sure that the transaction has been completed. So, it can be hard for

some to adjust to the idea of exchanging money through a mobile app or online.

This sort of thinking is mostly seen in older generations, like Baby Boomers.

Millenials have an easier time adjusting to the shift toward digital platforms.

Trust & Security

Users generally feel secure using online banking because they are used

to their bank handling their money. However, one may be wary of inviting a third

party such as Popmoney to handle their transactions.

There is a chance that one could receive a fake email from someone

using Popmoney as a front, but it’s actually a scam to steal someone’s money

and bank account info. Not everyone is able to recognize scam emails, in which

case online payment services like Popmoney are not secure. (The Balance)

Popmoney does not have “Buyer Protection,” so if something goes wrong

with a transaction and the user doesn’t receive their money, Popmoney cannot

be held responsible. Other payment services like PayPal do offer Buyer

Protection, and therefore are more secure. Popmoney has been used in email

scams, which isn’t good for its reputation, but so has Venmo, one of its top

competitors. (The Balance)

Popmoney is trying to promote paying relatively large sums of money

(over $400) using a mobile app, which some people may be wary of, since online

and mobile banking is a relatively new concept.

The Element of Time

One of the main complaints users have about Popmoney is that it takes a

few days for the money to transfer from one bank account to another. (The

Balance) This may not suit everyone’s schedule. Some may need the money

earlier and therefore prefer to pay directly in cash or check.

Complaints

Upon searching for Popmoney reviews, many negative complaints can be

found. Several users said it took several days to receive their money, and some

users claim they never received their money at all. Some users had problems

getting the app to function at all. These complaints are posted everywhere online,

which does not look good for Popmoney’s reputation.

The following webites list several complaints about Popmoney:

https://consumerist.com/2012/10/18/popmoney-seemed-easy-then-i-tried-to-

actually-get-my-money/

http://peer-to-peer-payments.credio.com/l/5/Popmoney

https://popmoney.pissedconsumer.com

Conclusion (Lily)

Popmoney is a personal payment service created by Fiserv.

Fee

Not top of mind--needs to distinguish itself from competitors

App doesn’t function well

Works Cited

Fiserv. Popmoney. 2016. 6 Sept. 2016.

https://www.fiserv.com/payments/personal-payments/popmoney-person-to-

person-payments.aspx

Popmoney. (2016). 7 Sept. 2016. https://www.popmoney.com/

PRSSA. 2014 Bateman Case Study Project Brief. “Popmoney Personal Payment

Service.” 6 Sept. 2016.

The Balance. FNBO Direct. “What Is Popmoney? Is It Legit?” Justin Pritchard. 27

July 2016. Web. 21 Sept. 2016. https://www.thebalance.com/popmoney-the-

basics-315142.

Time. “The Best Mobile Payment Apps for Sending Money to Friends.” Wolff-

Mann, Ethan. 12 Oct. 2015. Web. 21 Sept. 2016.

http://time.com/money/4041302/mobile-payment-apps-peer/

Plunkett, Jack W., Plunkett, M. B., Steinberg, J. S., Faulk, J., & Snider, I. J.

(2016). Smartphones and Financial Technology ("FinTech") Enable New Mobile

Payment Methods.Banking, Mortgages & Credit Industry. Retrieved September

21, 2016, from http://www.plunkettresearchonline.com.

K. (2010, November 28). Mobile Banking in the Emerging World. Retrieved

September 21, 2016, from

http://www.nytimes.com/2010/11/29/business/global/29iht-mobilebanks29.html?

_r=0

Side, R. (2016, July 23). The Battle Heats Up in Person-to-Person Payments.

Retrieved September 21, 2016, from http://www.wsj.com/articles/big-banks-join-

forces-to-compete-with-the-likes-of-venmo-1469266206

S. (2016, July 20). Best Apps to Send Money. Retrieved September 21, 2016,

from http://www.thesimpledollar.com/best-apps-to-send-money/

Gupta, S. (2013, February). The Mobile Banking and Payment Revolution.

Retrieved September 21, 2016, from The Mobile Banking and Payment

Revolution.

Lazar, S. (2011, December 9). How Dwolla is Building Its Brand by Giving Away

Cash. Retrieved September 21, 2016, from

https://www.entrepreneur.com/article/222536

S. (n.d.). Credit Card Processing & Business Solutions | Square. Retrieved

September 21, 2016, from https://squareup.com/

R. (2016). This Payment App Urges Its Young Users to ‘Pony Up’ in New Ad Campaign. Retrieved September 21, 2016, from http://fortune.com/2016/09/12/venmo-launches-first-major-ad-campaign/