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Why Big Banks Are Chasing Peer-to-Peer Payments Pioneer Venmo

My ears were ringing with abandon as I left the rock show I attended last week. It was a fantastic time by every measure—good company, great music, beautiful venue. As we descended flight after flight on our way out of the theater, I asked my longtime friend, who bought the tickets for both of us, how he’d like me to pay him back. “No big deal,” he said. “Next time we see each other. I don’t do any of that Venmo stuff.”

At 31 years old, my buddy is an anomaly. Most people under around age 35—I cringe just thinking about the “M” word—have no problem using peer-to-peer payments, which allow people to exchange money using only a phone number or email address. It’s one big reason why Forrester believes the market will reach $17 billion in transaction volume by 2019.

But not my friend. He has resisted.

Banks want to change that—and in doing so, put PayPal-owned @paypal(PYPL) Venmo on notice. Yesterday some of the biggest banks in the U.S. joined forces to support peer-to-peer payments between their customers. Meanwhile payment network operators like Visa (V) and MasterCard (MA) have been maneuvering to secure their own piece of what is quickly becoming the payment network of the future. The lesson here? The war for your wallets is on, man. For the moment, it’s not monetized. And tantalizingly, it’s entirely undecided.

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Yesterday morning I gave in and wrote my buddy a check, stuck it in an envelope, and dropped it in the mailbox. I figure he’ll get a kick out of the gesture. If nothing more, it seems like an appropriate way to repay him for tickets to an act that peaked in 1993.