What is the best way to pool money for a group purchase?
Have you organized a group purchase recently? Maybe you and all of your friends decided to pitch in 20 bucks each to buy someone that dream birthday gift? It might have been your favorite co-worker leaving for a new job, and you wanted everyone in the team to chip in to show appreciation and how much you’ll all miss them?
If this has been you, we know from experience it’s highly likely that collecting the money will have quickly become the most difficult and frustrating part of the whole process (closely followed by deciding what to buy Jennifer after 25 years of service to the company - but that’s another blog for another day…. Come to think, it’s actually this blog!)
Here, we’re going to focus on how Collctiv compares to the other ways that you can collect money to go in with other people on a group purchase.
Collctiv - Making it easy to pool money!
Let’s start with an important question - who are Collctiv? Well, we’re glad you asked. Collctiv is the group payments platform that makes it easy for organizers to collect and spend group money. We put the organizers amongst us at the center of everything we do and build, making it much more likely that this person will collect all the required money for a group purchase or booking, rather than sucking up the fees… again!
The contributors of the group don’t have to do any banking, download another app, create an account or even go to an ATM - they just simply tap/scan to pay in less than 5 seconds – no account set up, no banking, no fuss.
Collctiv has been used in 88 countries by over 350,000 people to process more than $20m of social payments in 62 currencies and we’re now bringing it to the United States of America!
What’s the best way to collect money from a group of people?
We know there are a number of different ways you can start to collect money from your buddies. Whether it’s PayPal or one of the newer players on the scene like Venmo or Zelle. Maybe your coworkers would prefer to pitch their $10 contribution with cash or even write you a check (because who doesn’t want to spend their own time heading to the bank to cash a check?!).
Each of these options brings a new headache to the table, let’s take a look into some of the common issues across these different players and how they compare.
Ring-fencing group money from your personal funds
You may be one of the millions of users who use Cash App for your daily groceries. Your Venmo is used to send and receive money daily for Starbucks and a beer or two after work with a coworker. PayPal or Zelle are used to split all of your bills between your roommates.
What does this mean when it comes to creating a money pool using one of these tools? Well, to put it simply, nothing is ring-fenced. It’s one big free-for-all and if people in your group contribute for a group purchase over the period of a month, then that’s a month full of your own personal transactions mixed with the group’s money.
All of a sudden, finding the total amount of money that you’ve collected along with who has paid and who hasn’t becomes a full-time admin job that no one is actually going to be paying you for. Your willingness to be the organizer amongst your friends/family/coworkers to make something awesome happen as a group is now taking so much more of your time and effort than you ever thought possible.
Enter Collctiv and our individual pool function. You can create a pool for any occasion, gift or event and share a unique link or QR code to the necessary people so their money only sits in the pool that it should. Pretty cool right?
Within the pool you’ll have the ability to see all the people who’ve contributed and how much, the running total amount, any messages that contributors have left and you can even choose a closing date. This gives you full visibility over the collection without blurring the line between your own money and what you’re responsible for from the group - saving you time, energy and allowing you to focus on making sure that whatever you’re collecting for is a success!
Make it easy for your Contributors and you make it easy to get paid!
With the boom of these new digital payment platforms, there’s also been a huge fragmentation of the market. How many of your group of friends all use Venmo and Venmo only? What about your workplace? We’re fairly sure there’s no hiring policy out there that makes using Cash App a requirement of employment.
So what does this mean for you? Well, when you go to organize your latest group collection for whatever occasion it may be, you’re going to head to your preferred platform and ask for people to pitch in that way. But what happens when the people contributing aren’t already signed up to this app? The most common outcome is that people are going to delay signing up (if they choose to at all!), and they’re going to let you suck up the costs for the foreseeable future.
Take Zelle’s banking app integration. If your friends/family/colleagues haven’t yet signed up then you’re creating a job for them to complete before you can be paid the money you’re owed. We’re sure these folks aren’t trying to be horrible or make your life difficult, but that job has now slipped to the bottom of 100 other things they have on their to-do list. What if there was a simpler way around this that removed this friction?
Well, there is! We've made it easy to collect money from people and most effectively, we've made it easy for people to pay in that money. Simply share a payment link or QR code with your group through whatever channel you communicate in and they can tap to pay, in less than 10 seconds. They don’t need to download an app or go through any lengthy sign up process, a couple of taps later and you’ve got your money. It really is this simple.
Take away the friction. Take away the excuses. Get paid what you’re owed.
Transparency of group money
Venmo, Cash App, Zelle and PayPal are all built and optimized for Peer-to-Peer (P2P) payments with one person sending money to another individual. That’s great, but when a group of people are coming together to pool their money, this ends up being less than ideal.
How so? Well, transparency is key for group collections. Let’s think about it. You’re organizing a collection for Brad in HR who has been with your company for a long time and has worked with most people in most departments in some capacity. You’ve put your hand-up/been nominated/been told (delete as appropriate) that you’re in charge of organizing a collection so that you can buy Brad an incredible gift to show everyone’s gratitude for what an awesome guy he is.
You send out an email to 100 people with your personal PayPal link and the dollars start to roll in (only from the people who already have a PayPal account though!), perfect. But some people have concerns. How much have we collected? Who’s pitched in? In the world of remote working, maybe 70 of these 100 people have never seen you before, let alone got to know you.
They don’t have a reason not to trust you, but now you’re feeling a little awkward that everyone is paying into your personal PayPal account with no accountability. Wait a minute though! Why should you feel awkward, you’re doing an incredible job of making sure everyone gets to show their appreciation for Brad?!
Collctiv allows you the functionality to decide for each individual pool you create whether the running total/individual payments are anonymous or not (and don’t worry, contributors can decide themselves if they’d like to stay anonymous). Like Hannah Montana famously said, Collctiv gives you the best of both worlds (I bet you're singing it now aren't you?!)
Keeping it digital
If we’re going to ignore the digital payments landscape and really go old-school with our collection, then we might start thinking about a cash or check. But let’s squash that thought straight away. The impact of COVID-19 and the rise in remote working means for coworkers pooling money, it’s an immediate non-starter on most occasions because people just don't have cash on them any more, and the chance of everyone being in the office when you are to accost them with your trusty envelope is incredibly slim!
Even if we look outside the workplace towards our friends and family, if they did have cash, who would want to be burdened with an envelope of notes and coins? Our research has found that using Collctiv as a digital payment tool also massively increased the total amount that organizers were able to collect by an average of 38% from their group! People find it so easy to chip in that you'll end up collecting more than you expect - winner!
Finally, the less said about taking a check from people and using even more of your own limited time to head to the bank, the better.
How can I pool money in a simple way?
Now that we've looked at the alternative solutions and the frequent issues that come up for pooling money, it seems pretty clear that Collctiv should be the way to move forward for any group collections (if we do say so ourselves!).
Whether it’s transparency you’re looking for, a more time-efficient solution or just something which doesn’t involve you scrolling through months of Venmo transactions for you to be able to confirm that your bestie Sarah has or has not paid their 20 bucks for your girls brunch, then Collctiv is your solution.
The process to set up Collctiv is simple. Creating an account to sharing a pool with your group can be done in less than a couple of minutes. From the contributor side, there’s no need to download the app, no account required, they simply tap and pay to ensure you get your money quicker. It takes less than 10 seconds! What’s not to like?
Collctiv will land in the US this September. If you’d like to be the first to hear about it and join our exclusive waiting list (along with the opportunity to mould the product. by speaking to one of our team) click this link to be amongst our very first users in the United States of America!