PayPal and online commercial bank The Bancorp Bank announced this week they will partner on P2P payments services. The announcement was first made at the Payments 2012 industry conference hosted by NACHA - The Electronic Payments Association.
The Bancorp Bank will utilize PayPal's Send Money for Financial Institutions P2P payment solution. The solution features API's that integrate into a bank's existing systems to enable it to offer P2P functionality to its customers.
The bank will also be partnering with the payments company to offer its Instant Account Creation solution, which allows the bank's credit and debit cards to be automatically added to PayPal accounts opened by their customers. Bancorp Bank marks the first U.S. integration of Instant Account Creation, which is currently in use by some banks in Spain.
Additionally, Bancorp said it will use PayPal's online account funding product, which is designed to help bank's reduce online account opening abandonment, according to the payments company. The product allows customers to fund new accounts via money from a PayPal account. Dan Schatt, head of financial innovations at PayPal, says most online account openings that are not completed are abandoned at the point the account needs to be funded.
Schatt says these products reflect PayPal's overall desire to work with banks in a mutually beneficial way.
"We are helping drive engagement at financial institutions and a better user experience," he says. "It's a win-win for us and the banks."