How Cell differs from Venmo, PayPal and CashApp

More than half of smartphone users in the US send money using some form of peer-to-peer payment service to send money to friends, family, and businesses.

Stocks of payment services like PayPal, which owns Venmo, and Block, which owns Cash App, boomed in 2020 as more people started sending money digitally.

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Cell, launched in 2017, stands out from the crowd in a number of ways. It is owned and operated by Early Warning Services, LLC, a co-owner of seven of the major banks, and is not publicly traded. The platform serves the banks beyond generating an independent source of income.

“Cell isn’t really a revenue-generating company on a stand-alone basis,” said Mike Cashman, a partner at Bain & Co. “You really should think of this as a bit of a shelter, but also as a retention tool as opposed to a revenue-generating machine. “

“If you already do business with your bank and you trust your bank, the fact that your bank offers cell as a payment method is attractive to you,” said Terri Bradford, a payments specialist at the Federal Reserve Bank of Kansas City.

A limitation of PayPal, Venmo, and Cash App is that all users must use the same service. Cell, on the other hand, appeals to users because anyone who has a bank account with one of the seven participating companies can make payments.

“It’s a no-brainer for banks to compete in this space,” said Jaime Toplin, senior analyst at Insider Intelligence. “Customers are using their mobile banking apps all the time, and no one wants to cede an opportunity to a third party in an area where people are already really active.”

Watch them Video above to learn more about why the banks created cell and where the service could be headed.

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