Banks are embracing the brave new world of peer-to-peer (P2P) payments with a sense of urgency as they watch non-bank competitors carve out huge slices of the market. Several banks co-own a payments system called clearXchange, but they don't agree on the fees to charge.

Meanwhile, Venmo, Snapchat, Square and other services already have millions of users and handle billions in personal money transfers. It's a death match, but the outcome is anyone's guess.

The P2P payments market is centered on the smartphone. Folks pull up an app and transfer money to another user of the app, using funds supplied from a credit card, debit card or bank account.

Bank apps tied into the clearXchange network provide instant service, an area where banks might have a natural advantage. Banks also have a leg up by controlling most consumers' cash accounts.

But the non-bank apps have already garnered many loyal users who might be hard for the banks to dislodge. Furthermore, non-bank P2P transfer providers will gain access in September to new Automated Clearing House facilities that allow intra-day payment clearance.

Bank of America, Chase, U.S. Bank, Wells Fargo and other big banks own clearXchange, which requires users to have a bank account, to register the account with the network and to download the payment app. Once users sign up, they can send payments to each other via the smartphone app. ClearXchange has attracted 28 million registered users.

To date, only U.S. Bank and Bank of America have rolled out clearXchange apps. The biggest difference among the banks is how much they charge for payment services. U.S. Bank charges $6.95 for instant transfers, but offers a free transfer service that can take up to three days. Bank of America's service is totally free.

The CEO of U.S. Bank, Richard Davis, acknowledges pricing discord among the competing banks, but feels that consumers must be discouraged from viewing the service as a free utility. Other bank P2P providers are Wells Fargo's SurePay and Chase's Quickpay.

Experts clash over who will gain the upper hand. Another U.S. Bank executive, Gareth Gaston, huffs that consumers don't trust start-ups as much as they trust banks. However, industry analyst Michael Moeser opines that, until now, banks have taken their eyes off the P2P payments market and are currently in catch-up mode.

All the while, non-bank apps have been making huge inroads in the market. For example, the simple and elegant Venmo app has proven to be very popular among college students. PayPal, with its 179 million users across the globe, owns Venmo, which reported first quarter 2016 transaction volume of $3.2 billion, more than doubling results from a year earlier.

Square and Snapchat offer apps that deposit payments into recipients' bank accounts quickly and another new entry in the marketplace, Facebook Messenger, has seen some success among Facebook users.

Wells Fargo will probably roll out its version of the clearXchange app this summer, and the fate of its current SurePay app is unclear. The bank has not yet said whether the service will be free.

Do you need a credit card? It pays to shop around using a credit card website like