Citigroup To Shut Down Money-Transfer Service

Citigroup Inc. is shutting down its 3-year-old c2it money-transfer service, which lets users transfer funds to other individuals electronically. The bank says the service will be discontinued Nov. 9, although current users will be allowed to view balances and account statements until Feb. 22.

Spurred by the success of PayPal, a person-to-person money-transfer service owned by eBay Inc., Citigroup and other banks had sought to cash in on what they viewed as a growth opportunity by offering services of their own, but one by one, these initiatives have fallen by the wayside as demand failed to materialize. Citigroup "should have done this a year ago," Gartner analyst Avivah Litan said Thursday. "There's no market for person-to-person payments."

C2it didn't do enough business to justify the costs of running it, according to Citigroup. "You needed critical mass to keep it as a standalone business, and we felt it wasn't profitable to do so," a spokeswoman told The Associated Press. Money-transfers can still be done through the retail bank.

Certapay, a person-to-person service operated by five Canadian banks--BMO Bank of Montreal, CIBC, RBC Royal Bank, Scotiabank, and TD Canada Trust--lets Canadians send and receive payments via their banks' online banking services. Four of the banks are offering the service and the fifth, Royal Bank, will do so shortly, a spokeswoman says. "Everything is working great right now."