If Venmo, Facebook and WeChat Pay are to be believed, social interaction is an essential component of a successful P2P platform. But in the wake of the Facebook/Cambridge Analytica incident, at least one vendor is betting privacy is far more valuable.
Called Mezu, the P2P platform has been live for about a week and uses a location-based code to execute payments, avoiding the need to even share usernames or other identifying information to move money.
"We've seen violations of privacy over the last 18 months, people are living through a nightmare of breaches, data exposure and all of the Cambridge Analytica scandal fallout," said Yuval Brisker, Mezu's founder.
There is a fear of oversharing and data exposure that cry out for an alternative, he said.
"When social mobile payments is your business strategy you can't avoid the negative side of it," Brisker said. "What we're saying is hold it, take a breather. P2P is really still just a small part of the market and focuses on small groups. So there's still a lot of runway with older people — Gen Xers and boomers."
Mezu uses what amounts to a location-based token, usable only at a defined location for a defined period of time. In practice, people standing within a few square feet of one another have a window of of about two minutes to complete a payment by entering a location-based code, though these factors are adjustable.
The app is positioned partly as a replacement for cash that preserves cash's anonymity. The primary use case is a one-off, retail-oriented payments among people who may have just met.
Other use cases, such as tips and donations, are enabled by a "drop" button that generates codes valid for six weeks. Mezu's standard features do not carry a fee, though it charges for credit card transactions and there are some management fees for Mezu accounts.
Mezu views itself as an alternative to Venmo, which has a social component that people use to communicate the purpose of the payment or other social information, though it has run into unrelated security issues due to social sharing. Venmo also plans to use its technology to allow retailers to communicate or deliver marketing content to users through social marketing.
The bank-led Zelle does not use these social tools, but it does execute payments via email, which Mezu considers "sharing information." Apple has a P2P function, which relies on Apple Pay enrollment. Facebook Messenger also offers a social P2P capability.
But even given the backlash over the exposure of personal information on social networks, there may not be widespread demand for an anonymized P2P app.
"I would say that the point of P2P apps that use a mobile phone number or email to facilitate sending money are going for the same thing, exchanging a minimal amount of personal information to be able to exchange money," said Talie Baker, a senior analyst at Aite Group. "I have not heard of any type of 'anxiety' prevalent in the market today…but I think it's possible this may come up as more people begin using digital apps, particularly the Gen X and Baby Boomer generations who are much less likely to want to share information."
Mezu's model is similar to Bump, which supported mobile proximity payments between smartphones and worked with clients such as PayPal. Eventually Google acquired the technology, then shut it down. Mezu does not rely on NFC technology, but a location code that Brisker contends is easier to use and more flexible.
"Google Bump uses multifaceted technology that was based on motion sensors and proximity, and they sunsetted it right away," Brisker said. "We use location based technology that's configurable."
Mezu may succeed if its marketing plays up its ease of enrollment.
"Getting a code adds one more step in the process so it needs to be frictionless," said Baker, who also warns against app overload. "This is a problem with all the P2P apps. None of them are interoperable which inhibits adoption. I don’t think the market is moving towards solving for this issue right now but I think that’s key for the long term viability of these apps."