AppTech Payments Aims to Take on Venmo With InstaCash

Frictionless commerce firm AppTech Payments completed the pilot of its Banking-as-a-Service (BaaS) platform.

Now, the company will use the BaaS solution for the commercial launch of InstaCash, a real-time pay-by-bank transaction system that AppTech is positioning as a rival to both Venmo and Western Union, according to a Thursday (May 16) press release.

“The success of our BaaS pilot program signifies a significant milestone as we continue our mission to democratize banking by providing small and medium-sized enterprises access to products traditionally reserved for Fortune 1000 companies,” said AppTech CEO Luke D’Angelo. “The availability of treasury products, including T-bills and other high-yielding financial products are differentiators that we believe will help drive user growth as over 200 new independent sales organizations are expected to utilize our BaaS platform in the near term.”

InstaCash will offer a pay-by-bank transaction system that operates in real time, similar to the FedNow® Service, per the release. Each bank and credit union will have its own closed-loop network, so relationships remain between the financial institution and the consumer.

“InstaCash acts as the glue binding these networks together, enabling consumers to transact instantly and securely over a unified ledger,” the company said in the release, adding that the offering “functions much like an Intel chip,” integrating with any bank’s infrastructure and providing processing capabilities that work on-site and in the cloud.

The launch comes as education is proving to be a major barrier to consumer adoption of pay-by-bank, according to PYMNTS Intelligence.

While 36% of consumers use these methods, there is a gap in understanding among people who don’t, with the same percentage of non-users listing a lack of knowledge of how these payments work as the key reason for not using pay-by-bank, also known as account-to-account payments. However, plays in this sector have taken note of consumers’ confusion and the challenges it presents.

Ed Dean, vice president of product at Nuvei, told PYMNTS in an interview last year that there is a lack of familiarity that’s hindering the wider use of pay-by-bank, and this stems from newer use cases being constructed around an old payment system.