P2P payments started as a paper-based payment solution, it is morphing into a clean, digital payment method. With no-fee disruptors such as Venmo and Square Cash, we are now seeing the next move into ultrasimple customer interfaces and social media.
Boston, MA (PRWEB) February 12, 2014
Demand deposit accounts have become the mainstay of banks’ and credit unions’ relationship with their customers and members. The appeal of this core deposit relationship was expanded first through checking account access and later through debit cards. Further enhancing the core account relationship have been person-to-person (P2P) payment services, offered initially through PayPal starting in 2000 and then through financial institutions’ P2P services and third-party P2P.
Financial institutions need to pay attention to P2P payments offerings and understand how they are evolving. Though stymied to some extent by lack of consumer awareness, limitations on usability, and fees, usage is building, especially among the Millennial generation. New entrants joining the market over the past two years were Square Cash, Venmo, Evenly, and Ribbon. Of these, two were quickly acquired—Venmo by Braintree, which was then acquired by PayPal, and Evenly by Square. These new services offer simpler functionality than financial institutions’ P2P services, and they provide social network linkages, all appealing to the Millennials. Mercator Advisory Group’s latest Research Note, P2P Payments: Financial Institution vs. Third Party Digital Solutions, provides some historical context for digital P2P payments, a description of digital P2P payments, consumer research on digital P2P payments, and the types of P2P payments, the way the various models work, including pricing comparisons.
“P2P payments is not a new concept, but an evolving one. Started as a paper-based payment solution, it is morphing into a clean, digital payment method. With no-fee disruptors such as Venmo and Square Cash, we are now seeing the next move into ultrasimple customer interfaces and social media,” comments Ron Mazursky, Director, Debit Advisory Service at Mercator Advisory Group and author of the report.
Highlights of the report include:
- The starting point in digital P2P payments
- Definition of P2P models defined: financial institution vs. third-party digital P2P payment solutions
- The demand for digital P2P payments and future prospects for P2P
- Leading P2P vendors by service model
- Pricing comparisons of leading P2P service providers
This Research Note has 13 pages and 5 exhibits.
Companies mentioned in this Research Note include: Accel/Exchange, Ally Bank, Amazon, BBVA Compass, Capital One, Chase, Citibank, Citizens Bank, clearXchange, Dwolla, Fifth Third Bank, FIS, Fiserv, Google, Obopay, PayPal, PNC Bank, Pulse, Sprig, Square, Star, SunTrust, Univest, U.S. Bank, Venmo, Visa, Wells Fargo, Western Union.
Members of Mercator Advisory Group’s Debit Advisory Service have access to these reports as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.
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About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com.