A Reading, Massachusetts community bank will be the first to go live with P2P payment service Chuck, a report from American Banker says.
Chuck was developed by 12 small banks to be a cheaper and more versatile alternative to Zelle.
Chuck plans to roll out with more banks in the near future. Some of them have already begun looking into additional digital banking services that they might develop alongside Alloy Labs Alliance, which has been guiding the group.
Zelle was too expensive for the makers of Chuck, and was also inflexible for their needs – they wanted to support things like Venmo while also managing the service with their own banking apps, the report says.
Chuck allows users to start P2P payments using several methods, including ACH or Venmo. FedNow will be added eventually, by 2023, according to those involved in the consortium. FedNow is a new instant pay program the Federal Reserve banks have been developing.
“We didn’t want Zelle because of the pricing and options, and we saw so much more demand for just account-to-account or Venmo transfers that doing our own service made more sense,” said Julianne Thurlow, president and CEO of Reading Cooperative Bank.
Reading Cooperative Bank is a $662 million asset. The bank tested Chuck for weeks before its debut. That bank didn’t ever have an intent to adopt Zelle – as, according to the report which quotes industry observers, it charges banks 45 to 90 cents per transaction. That ends up with smaller financial institutions paying the higher fees.
Speaking of Venmo, the payments platform has recently debuted a gift-wrapping feature. That will allow users a new way to send money to their loved ones, with eight new gift-wrap designs, which can be added to a note.
Read more: Venmo Debuts Gift-Wrapping Feature
Almost 80% of Venmo users have said they’ve sent money as a gift through Venmo or other P2P payment services in the past year, with 86% saying it was easy to do so and they enjoyed that aspect of it.