These apps may not seem like much of a threat as long as they stay in their lane — but increasingly, ride-sharing companies are pushing the limits of how their apps can be used for payments.
This listicle is compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald and David Heun. Click the links in each item to read more.
Uber hints at big plans for digital money
An e-money license would enable Uber to build a Venmo-style experience to allow riders to split expenses. Becoming a global P2P player will also likely require more regulatory approvals than the one it seeks in the Netherlands.
"Implementing a new business model implies new capabilities for the consumer, which will almost certainly need to use the account for more than a simple payment, so new platform capabilities will be required," said Tim Sloane, vice president of payments innovation and director of the emerging technologies advisory service at Mercator Advisory Group. "To support this, new disclosures and consents must be introduced and managed with consumers."
Uber will also have to deal with fresh issues of enrollment. The end user agreements it has in place for passengers are likely insufficient for operating a digital wallet, Sloane said.
"If Uber wants to be a P2P enabler in the U.S. it would fall under the prepaid rules of the CFPB, which would require significant consumer consent prior to receiving funds," he said.
Uber certainly has the scale it needs to build a payments platform. Uber recently passed the 75 million rider mark and provides 15 million rides per day globally, with the average rider spending $50 per month on the ride sharing app. In the U.S., it has a 77% share of the ride sharing market, and by some counts has taken a quarter of the market away from New York's yellow and green cabs.
"When considering the many companies that stockpile 'cards on file,' Uber is likely in the top 20," Sloane said. "Braintree and others have tried to utilize the stockpile to create new business and revenue streams, so why not Uber?"