Shazam Launches Its Bolts App, With Debit-Based P2P Transactions To Come

The Shazam debit network on Monday took a step closer to entering the fray for near real-time person-to-person payments with the launch of its Shazam Bolts mobile app.

The app, which works on smart phones and tablets running Apple Inc.’s iOS software, will initially enable financial-institution customers to receive alerts and check balances on their debit card accounts. But Shazam plans to introduce a P2P feature this summer, says Dan Kramer, senior vice president of marketing and merchant services at the Johnston, Iowa-based Shazam, one of the largest electronic funds transfer networks in the country still owned by its member institutions.

The P2P service will rely on mobile-based PIN-authentication technology from Plantation, Fla.-based software vendor Adaptive Payments, in which Shazam holds an interest.

Some 24 member institutions have been testing Shazam Bolts (Shazam renders the “S” as a dollar sign) with employees, and another 40 have signed up to launch the service commercially, Kramer says. The app, which allows users to customize alerts according to factors such as transaction threshold and type (for example, card not present), represents technology Shazam’s mostly smaller members are looking to the network to provide as big tech powerhouses like Google Inc. and the wireless carriers increasingly invade payments, Kramer notes. “They look to us for these types of products and services,” he says. “They’d have difficulty getting these things at a decent cost [from outside vendors].”

Kramer adds that it’s hard to predict the ultimate consumer adoption for Bolts once the P2P service is added. But he expects the network’s younger users to take it up in increasing numbers. “You will see some adoption of the technology but it will be slow until that [younger] demographic catches up,” he says. “Mass adoption takes time.” Takeup among member institutions should be strong, Kramer says. “We’d anticipate seeing quite a bit more interest,” he says.

Shazam originally planned to launch Bolts last summer but had to delay the technology as its technical teams wrestled with questions surrounding how to implement EMV chip cards that can meet a Durbin Amendment requirement for transaction routing, Kramer says. Shazam, along with other debit networks, has developed a proposal for a common app that would allow EMV debit cards to meet the Durbin requirement that transactions work on at least two unaffiliated networks.

If the launch of the P2P service for Bolts takes place as planned, Shazam will join a small but growing group of technology companies looking to speed up money transfers between individuals and between customers and merchants. Dwolla Inc., based in nearby Des Moines, last year launched a service that lets users instantly fund Dwolla accounts from underlying bank accounts. Both Fiserv Inc. and Fidelity National Information Services Inc., which own the Accel/Exchange and NYCE debit networks, respectively, have introduced near real-time funds transfer services that rely on their networks’ banking links. And a trio of money-center banks—Bank of America Corp., JPMorgan Chase & Co., and Wells Fargo & Co.—have built a P2P network called clearXchange for transfers among customers of the three.

Also, Acculynk Inc., an Atlanta-based software vendor whose technology enables PIN-debit transactions for e-commerce, last year launched a P2P version of its product. Kramer says Shazam, which is one of 11 networks that have signed up to support Acculynk, is open to offering the Acculynk service side-by-side with Bolts. “We’re offering multiple capabilities to our customers as something we need to do,” he says.

The Bolts app is offered free to Shazam members, which may in turn offer it free to customers or reprice it as they see fit. For P2P transactions, ordinary Shazam switch fees will apply. Kramer says the network doesn’t disclose these fees publicly but adds they run at or under a nickel per transaction.

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