Redwood Credit Union launches new person-to-person payment system
Redwood Credit Union has launched a new service that allows its customers to send money digitally to another person, catching up with online providers who have capitalized on the payment product popular with millennials.
Its new product, RCUpay, allows the more than 285,000 members of the Santa Rosa credit union to send money to another person even if they bank at another institution. It is available through Redwood’s website and mobile app. No fees are charged for the service.
The recipient receives notification of the bank transfer via text or email, which includes a security code to claim the funds. Redwood customers receive the money immediately, while others can get their funds within one to three business days.
Several hundred customers have used the product since it became available about three weeks ago, said Ron Felder, Redwood’s executive vice president.
“We have had quite a few transactions,” Felder said. “We are getting a lot of positive feedback.”
The growth in such person-to-person payments has been driven by younger customers who are typically tethered to their smartphones. Nonbank companies such as Venmo and Popmoney have captured significant segments of the $80 billion market, which also has caught the attention of traditional banks and credit unions.
“There is certainly a segment that has never wrote a check and will never write a check,” Felder said. “That’s the digital age that they have grown up with.”
The number of U.S. consumers who make such payments via mobile devices will grow from 69 million in 2015 to 126 million by 2020, according to Javelin Strategy & Research.
Redwood’s entry follows that of Exchange Bank, which started its person-to-person payment system in 2012 as officials with the Santa Rosa bank realized their tech-savvy customers were using such technology.
“We will continue to evolve our technology to fit the lifestyles of our customers,” Ann Hudson, senior vice president for Exchange Bank, said in an email.
You can reach Staff Writer Bill Swindell at 521-5223.