PayPal has announced that it is to close its Money Pools service, not long after Barclays Bank made a similar announcement re its PingIt service.
Launched in January 2019, it was designed to make collecting money from friends easy and simple. However, in reality it was the opposite.
Collctiv's Chief Technology Officer, Pete Casson, unpicks the issues.
Money Pools was hidden within the PayPal app and was never really given the prime time treatment. In theory it should have been hugely successful, PayPal have a customer base of over 337 million users worldwide that had instant access to Money Pools. So why are they closing it now? PayPal say that "This action will allow us to sharpen our focus on more specialized money raising services" which doesn't really tell us anything. My guess is that it simply wasn't used that much or driving significant revenues. By why did it fail?
Poor experience
As we have found out on our journey of building Collctiv, user experience and simplicity is everything. Our aim with Collctiv is to make it incredibly quick and easy to collect money from a group of people. Anything that slows that down or stops it from happening needs to be stripped out or overcome. Money Pools always felt like it was a loss leader for PayPal, a feature to make customers use other PayPal services, it was never the main reason to use PayPal. Creating a Money Pool was a clunky experience involving 4 screens and creation restrictions that meant you could only use it for very specific collections. The process of paying into the pool was difficult as well with PayPal pushing you to create an account rather than focusing on the actual objective, to make a payment. You could pay as a guest, which involved even more screens, but there was no option to quickly pay with Apple or Google Pay, again adding to the friction experienced by anyone trying to use it.
Our aim with Collctiv is to make it incredibly quick and easy to collect money from a group of people. Anything that slows that down or stops it from happening needs to be stripped out or overcome.
Lost focus
Money Pools was never the main focus for PayPal and felt like a secondary product that was created as customers demanded it rather than PayPal wanting to solve the problem of collecting money from your friends. You always felt like PayPal was pushing you to use their other services such as credit or Pay in 3. This, for me, is where PayPal and other FinTech companies make their mistake. You have to be completely focussed on solving the problem for your customers, in this case the pain and hassle of getting your friends to pay for an event or gift. Everything else is secondary, do the primary goal really well first, the rest will follow.
You have to be completely focussed on solving the problem for your customers.
What's next?
PayPal are giving existing Money Pools customers until 8th November 2021 to close their pools. If there are any funds left in the pools at that point, then they will be transferred to the customer's main PayPal balance.
Organising something for your group of friends?
For any Money Pool customers looking for a new and easier way to collect money for their next whip-round, event or activity then we're here to help. Download Collctiv from the App Store or Google Play, create your pot and you're ready to go!
