The increasing use of mobile technology has spawned a new industry that many in trucking – from drivers to fleets – can take advantage of: peer-to-peer (P2P) payments. Using data from the U.S. Federal Reserve and others, Business Intelligence estimates the P2P payment market will reach $715 billion this year, with $60 billion of that on mobile devices. Mobile is where the growth is, though, with the publication estimating mobile P2P will reach $336 billion by 2021 out of a total $738 billion.
So where does that leave trucking and truck drivers? Positioned perfectly to take advantage of this trend. Many are already familiar with some forms of P2P payments, although they may not be aware of what they actually are. If you use Paypal, you are participating in a P2P payment process. Apple, Google, Samsung, Venmo and now Zelle also offer services.
P2P payments, sometimes called person-to-person, allow funds to be transferred from one account to another, often with a mobile device. Funds can be transferred in two ways. The first involves a party creating a secure account with a third-party vendor, such as a bank or PayPal, and uses that service to transfer funds to another party that is a member of that network, i.e. a PayPal user. Zelle has expanded this process, allowing customers of one bank to easily and quickly transfer funds to another.
Zelle is among the newest entries. JPMorgan, Bank of America Corp., Wells Fargo & Co., U.S. Bancorp and Capital One Financial Corp have joined forces for Zelle, and while it doesn’t have a direct impact on the transportation industry, it does allow banks to quickly transfer money between each other, speeding up payments, and for users to make faster payments.
Bank of America said that in October its customers made Zelle payments totaling $1.5 billion. “Our customers are increasingly choosing electronic payments over cash, and Zelle is becoming their first choice for convenient, secure payments,” said Mark Monaco, head of Enterprise Payments at Bank of America. “The introduction of Zelle has nearly doubled the adoption of our P2P technologies year over year.”
The second method, and one that is growing in popularity, involves the sender transmitting a payment via a mobile app to a third party that receives a link. Once the link is opened, it allows the receiver to input their bank account information to receive the funds. In this method, the sender never sees the bank account information and the receiver does not have to have an account with the sender or the sender’s financial institution.
The growing mobile opportunities to use P2P payments can be extremely beneficial to truck drivers, including from a safety perspective. With apps allowing drivers to be both paid electronically and pay for goods and services with their phones, they do not need to carry as much cash on their person. There is also the elimination of fees associated with removing funds from ATMs.
Owner-operators who accept brokered loads or even loads directly from shippers can greatly benefit from a P2P payments program, allowing them to accept payment from a variety of lenders for loads delivered without the need to fill out long forms and sharing banking information. It also assists brokers/shippers who do not have to go through the process of collecting a driver’s financial information to make a payment and it eliminates the need for mailing checks.
Triumph Business Capital offers something called TriumphPay, which automates the payment process by allowing brokers and shippers to outsource their payments.
Users have access to visibility into the payment process and the system integrates with most TMS systems. When a shipper or broker automates the process, payment is generated from the TriumphPay system and sent to the appropriate financial institution. A carrier is set up in the TriumphPay system and can choose their payment terms, including via a fuel card.
Comdata also offers a P2P program it launched earlier this year, Comcheck Mobile. “Through the Comdata Proprietary Network, Comchek Mobile users can send, receive and access funds via their Comdata Card and an easy-to-use smartphone app that work seamlessly together to simplify payments for driver advances, settlement, lumpers, repairs and other common over-the-road needs,” the company said.
To use Comchek Mobile, shippers, brokers and 3PLs simply set up an account to make payments to carriers or drivers. Once installed, payments can be sent directly to Comdata cards. Carriers can choose to have driver funds sent directly to the driver or to those involved in the process, such as lumper fees, relieving the driver of the responsibility to collect necessary paperwork and/or make the payments themselves and then seek reimbursement.
“We’ve seen rapid growth in electronic and peer-to-peer transactions throughout the global economy, as well as within the trucking industry itself,” said Greg Secord, president of North American Trucking at Comdata. “Comchek Mobile brings this modern functionality to our customers, giving them an easier way to send and use the funds they need, when they need them.”
From a driver perspective, having the money transferred directly to their Comdata card gives them access to funds sooner. In addition to providing payment flexibility for both senders and receivers, Comchek Mobile delivers security and transparency in their payments operations. All users on the network are authenticated and approved, and their unique user IDs ensure that all transactions can be verified and tracked. Similar to a banking app, Comchek Mobile features reporting functionality that provides total visibility into how, when and where funds are used, including confirmation of all funds sent and received.
The end result for everyone involved in the transaction, though, is quicker payments.
“Using Comchek Mobile, we have significantly reduced the amount of time it takes to distribute funds to drivers,” said Sue Schoenthaler, Logistics & Operation Manager at Evans Delivery. “More importantly, the system has helped eliminate extra administrative work for our clients, which ultimately saves them money they can reinvest in their businesses.”
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