MADISON, Wis (1/28/11)--Consumers appear willing to embrace person-to-person payments (P2P), but the market still needs a nudge, probably in the form of educational and marketing efforts, said representatives from credit unions who have tested the P2P waters. “It is coming,” said Donna Bland, president/CEO of The Golden 1 CU, Sacramento, Calif. “People don’t carry cash anymore. They carry debit cards. But they can’t make payments to friends with a debit card. This is the alternative.” The Golden 1, a $7 billion asset credit union, has been offering P2P payments since last summer. The credit union uses the ZashPay P2P system from FiServ. Members are automatically enrolled when they sign up for online bill payments. Senders enter the recipients’ e-mail address or mobile phone number to forward payment. Bland said P2P is “picking up steam” with her membership. She said the biggest obstacle to wide-scale adoption is a lack of understanding on how the system works. Most consumers don’t understand it yet,” Bland said. “They ask, ‘How do I send money though an e-mail?” P2P payments were an instant success at $9 billion BECU in Tukwila, Wash.--roughly 4,000 members signed up in the first month the credit union offered P2P payments last spring and BECU now processes $8 million in payments a month. Howie Wu, vice president of virtual banking at BECU, agrees with Bland that the mainstream marketplace needs to become familiar with the logistics of P2P payments. “I think general public is ready for this once they learn about it,” Wu said. “There’s a learning curve to any new technology. From my standpoint if you educate the member on it, promote the product, and they give it a try, they’re hooked.” Wu said BECU call center and branch staff are trained to help members get started with P2P payments. BECU employs Popmoney from CashEdge for its P2P payments. Members who use P2P find creative ways make payments more convenient. For example, Wu said making payments to day-care providers via P2P is popular among BECU members. “Daycare providers love it,” Wu said. “Dealing with [automated clearinghouse] is a lot cleaner than managing cash or check on a monthly basis.” Anthony Vitale, vice president of information technology at Patelco CU, San Francisco, said his members also use P2P to expand their payment options. The average P2P payment at Patelco, which also employs Popmoney, is about $550. Vitale said members are using P2P to pay rent. P2P payments use the ACH system; most bill pay systems still complete their payments by check, Vitale said. The market would be more likely to reach a tipping point with a marketing push from a big national financial institution, like Chase or Bank of America, Vitale believes. Like Wu, Vitale said the general public has yet to learn about P2P payments. He estimates between 300 and 500 financial institutions offer P2P. Among the financial institutions that do offer P2P payments, The Golden 1’s Bland said the key is getting members to try it once. “That’s why education is the real key. If they try it once, they realize how simple and convenient it is,” she added.