Peer-to-Peer lending has grown in popularity significantly over the last two years because of the pioneering work done by Prosper.com, Lending Club, and a few other entrants into the market place. One company, Fiserv (NYSE: FISV), hopes to bring the concept of person-to-person away from specialized marketplaces and back to your local bank using a new technology that will allow you to loan money to your friends and family easier.
Fiserv, a provider of financial technology services, recently announced plans for a new person-to-person lending service that will allow for the quick transfer of funds between individuals. This new service will be made available to more than 3,100 financial institutions that make use of Fiserv’s services.
The company believes that its new product will be a hit. Fiserv performed a study in June of 2009 about whether or not consumers would be interested in such a service and found that three out of four respondents said they would rather have access to a person-to-person lending service at their own financial institution rather than from an outside source such as Prosper.com or Lending Club. 83% of respondents said that it’s important for funds to be deposited directly into the recipient’s account rather than being sent through a third-party system.
Initially, the program will be available to Fiserv clients using its CheckFree RXP online bill payment platform during the first half of 2010. Other firms will be able to connect to the service using web services after its initial launch.
Although Fiserv’s internal survey indicated that consumers would have high interest for the product, it’s unlikely that it will replace Prosper.com or Lending Club as a means of borrowing money. Typically users of these two services are looking for a significant loan to make a purchase, rather than borrowing $5 or $10 for lunch from a friend. Instead, it’s more likely that Fiserv’s new peer-to-peer payment system will likely be more competitive with PayPal, which has offered a similar service for years.
