A lot of money gets passed around informally every day — when we pay someone back for dinner, pay a babysitter, or pay a roommate for rent.
Now a bunch of different tech companies and banks are offering apps that can make this process easier and all but eliminate the need for cash and checks. The problem: there’s no money to be made from facilitating these transactions.
So why are so many businesses clamoring to get into this space?
The answer is different depending on the company — for banks it’s critical to keep up with consumers’ account needs while for social messaging apps it’s a broader play for the e-commerce market.
Here are some of the key takeaways from the report:
- We estimate that US annual peer-to-peer (P2P) payments — informal payments made from one person to another — reached over $US540 billion in 2014.These payments were made by cash, check, digital money transfer, or other means.
- Mobile P2P payments are having a huge impact on this informal economy and diminishing the need for cash and checks. We forecast that mobile P2P payments will grow to $US174 billion during the same period. That means that 30% of P2P volume will be paid via mobile, up from 1% last year.
- There are four types of businesses making major moves in mobile P2P payments: social messaging companies, banks, card networks, and other payment companies. Each of these types of companies has its own objectives and strengths in offering mobile P2P payment services which we explore in the report.
In full, the report:
- Forecasts the value of total and mobile P2P payments made in the United States from 2014-2019.
- Explains the networks that P2P payments providers use to move value from one person to another.
Analyses why mobile P2P apps are seeing such a rapid uptake among millennials and other demographics.
- Explores the disparate objectives different companies hope to achieve by offering these services.
To access the full report from BI Intelligence, sign up for a 14-day trial here. Members also gain access to new in-depth reports, hundreds of charts and datasets, as well as daily newsletters on the digital industry.
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