Wells Fargo takes on Venmo but isn’t ready to tell the world
For years, users of mobile-money service Venmo have been able to instantly transfer money to each other, free of charge.
That’s something banks have been slow to offer their customers, but several big banks are now on board, allowing customers to send money to customers at their own institutions and a handful of others. The latest to join the club is Wells Fargo & Co., which started allowing its customers to send instant “peer-to-peer” payments earlier this week.
But don’t expect the San Francisco banking giant to say much about it just yet.
While Venmo users can transfer money among themselves even if they bank at different institutions, it’s not so cut-and-dry with the new system big banks are using. Wells Fargo customers can now send money instantly to other Wells Fargo customers, and to customers of Bank of America, Chase, U.S. Bank and Capital One.
That’s a lot of customers — perhaps about two-thirds of American checking account holders — but it’s not quite everyone. Try to send money to someone who banks at the local credit union or even a regional bank, and you’re out of luck.
So while Wells Fargo and others want to offer a new tool for customers — and to take back some of the market share now owned by Venmo, which PayPal acquired in 2013 — they’re hesitant to make too big a deal out of a system that, for now, might let you send money to about two-thirds of your friends.
“Wells Fargo plans to promote this option more widely in the months to come, once more banks – and more customers – are included in the network,” said Wells Fargo spokesman Kris Dahl. “We believe the real-time payment option will only continue to deliver more value to our customers as the network grows.”
Bank customers can get to the new money transfer tool through their bank’s mobile app. To send money, you only need to enter the phone number or email address of the person you’d like to send money — though that person has to have signed with their bank to receive money. To do that, customers have to tell the bank which email address or phone number they’d like friends to send money to, and the account they’d like that money to go to — checking or savings, for instance.
Between that somewhat cumbersome process and the still-limited number of customers who can send and receive instant payments, for now the simpler and more universal option appears to Venmo, which processed $3.9 billion in peer-to-peer payments in the second quarter, up more than 140% from the same quarter last year. Paypal does not report the number of Venmo users, but estimates range from 3 million to more than 15 million.
But a spokesperson for Early Warning, the company that runs the instant payment system Wells Fargo and other banks are using, said it is in the process of signing up more banks. And they point out that the system is already available to more than 70 million mobile banking customers.
What’s more, the company, which is owned by several big banks, announced this week that it has inked deals with Visa and Mastercard that would open the system to any consumer with a Visa or Mastercard debit card. That’s similar to Venmo, though those customers will have to go through an Early Warning app, not their bank’s app, to make transfers.
Vision Industries, a Long Beach company that hoped to build hydrogen-powered big rigs, was backed by the federal government and the local ports. It worked with one of the region’s largest harbor trucking firms. And it was run by an unlikely CEO: Martin Schuermann, a German former media executive married to MTV personality “Downtown” Julie Brown.
If all that isn’t strange enough, now, nearly two years after Vision filed for bankruptcy, an investment firm in the tiny Mediterranean nation of Malta is suing Schuermann for fraud, saying he lied to them about Vision’s prospects and convinced them to invest millions in the firm before driving it into bankruptcy.
In a civil suit filed recently in Los Angeles federal court, Quality Investment Fund Malta 1, a private investment fund based in the Maltese capital of Valletta, said it put more than $3.7 million in Vision, in large part because they believed the truck maker had an agreement to sell hundreds of trucks to L.A. trucking firm Total Transportation Services Inc. (TTSI).
TTSI had worked with Vision, testing the firm’s hydrogen-powered trucks around the ports of Los Angeles and Long Beach starting in 2011. The twin ports each paid more than $200,000 to Vision to help it build its prototype trucks. The firm was also awarded more than $4 million in grants from the Department of Energy, according to company filings.
Also in 2011, just as Vision was set to unveil its trucks, the company reported that it had reached a deal under which TTSI would buy at least 100 hydrogen trucks for a total of $27 million, and could later buy as many as 300 more.
But those truck sales never happened. The Maltese investment firm alleges in its suit that Schuermann presented the sales as a sure thing, even though they were not.
Schuermann told The Times this week that he had not seen the lawsuit but that Quality Investment Fund representatives had all the details about the agreement between Vision and TTSI and that the investment firm had no reason to be caught off guard.
“They were personally involved in some of the negotiations and meetings with TTSI,” he said. “They were at the table.”
Vision filed for bankruptcy protection in September 2014 after Quality Investment Fund and other investors balked at a plan for the company to raise new capital by issuing millions of new shares. Initially, the company hoped to restructure itself through the Chapter 11 process, but later decided to liquidate itself instead.
The Maltese investment fund is demanding Schuermann pay back at least $3.7 million, plus punitive damages.
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