By Ray Birch
NAPERVILLE, Ill.—With a goal of retaining relationships, Alloya Corporate Federal Credit Union is reporting it has introduced a new peer-to-peer payments solution it says gives CUs an offering that competes well with other P2P solutions.
Alloya Chief Strategy and Innovation Officer Jim Schneck told CUToday.info the corporate set out years ago to find a P2P solution for credit unions that would be different from others on the market.
“No longer are consumers charged with asking credit unions, ‘Do you have Venmo?’ or ‘Do you use Zelle?’ We wanted one that would strengthen member relationships rather than outsource them,” he said. “One that would mitigate fraud losses rather than encourage them. One that would allow consumers more convenience, more control, more security and, most importantly, more value.”
The solution was developed in partnership with two fintech companies, Neural Payments and Prizeout.
The New Payments Engine
“Founded in 2019, Neural Payments is a new payments engine that moves money on traditional rails, modern fintech and real-time payment systems. Unlike traditional P2P solutions, Neural Payments makes it easier for users to send and receive money regardless of the recipient’s app,” said Schneck.
The new solution lets credit unions offer P2P payments directly within their digital banking platform, giving “peace of mind.”
“P2P payments are sent through the credit union’s existing digital banking app, a familiar interface that members trust,” Schneck said.
How it Works
To select a payment recipient, the member chooses from their phone’s contacts list, then initiates an email or text message—ensuring the payment always goes to the intended person.
“Members can send money effortlessly and receivers have the power to choose where they want their money to go,” Schneck explained. “In addition, Neural Payments’ proprietary rules-based fraud engine makes the credit union the gatekeeper of the solution, stopping suspicious payments before they’re even sent.”
Schneck emphasized that CU members no longer need to concern themselves with their recipients’ preferred payment channel.
Jim Schneck
“With our solution receivers always have the power to choose where they want their money to go without having to download an app or register an account,” he said. “Plus, by eliminating these steps, this solution also eliminates a variety of vulnerable touchpoints that fraudsters frequently exploit.”
Two Ways to Fight Fraud
With P2P fraud rising, Alloya’s solution prevents fraud in two key ways, Schneck said.
“In other P2P solutions someone can download an app pretending to be someone else and start doing transactions on behalf of someone else,” he said. “With ours, there's no app to download—you eliminate all app registration fraud. All you're doing is going into the credit union’s home banking app, going into the menu structure and initiating a send from there. There's no separate app.”
The other aspect of the solution that helps CUs fight fraud is a very flexible fraud rules engine, Schneck said.
“That allows the credit union to define all kinds of situations,” Schneck said, such as restricting sending to only certain individuals, watching for password changes and frequent payments of a high amount to the same individual. “You can define these rules very easily and define what you want the system to do when those are triggered.”
Choice Available
Schneck added that upon receipt of a P2P payment, the recipient can choose how they want to receive their funds.
“Direct to their debit card, into their PayPal or Venmo account, in the form of a digital gift card—through Prizeout—or directly into their bank or credit union account, which is coming soon through integration with the FedNow service,” he said. “There’s no need to worry about moving money between third-party digital wallets.”
The solution also offers a revenue stream for credit unions, the company said.
“When P2P recipients elect to withdraw their payment in the form of a digital gift card, that gift card generates incremental income for the credit union with each redemption,” Schneck said. “And it also grows membership. White-label capabilities enable every credit union to customize the member experience and user interface. The sender enters their credit union’s digital banking app to initiate the payment, strengthening their connection to the credit union. The recipient gains exposure to the credit union branding upon receipt of the payment, opening doors for membership growth.”