Why P2P Apps Haven't Caught On In The US

p2p payments

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Banks and other companies like PayPal have been pushing person-to-person (or P2P) payment apps on young consumers for a while, however, they’ve yet to catch on in America. What gives?SmartMoney’s Kelli B. Grant says it might have to do with security. For all the convenience of being able to quickly transfer money, split fares and pay cabs, consumers are still “dabbling in the mobile banking space” because it’s not as secure—or efficient—as it is abroad.

Only 37% of American consumers with Android phones were using a banking or finance app in June, according to NPD Group, whereas overseas those numbers were much higher. 

Here are few other reasons the trend has yet to blow up stateside: 

The law is still murky. Who’s there to protect consumers if someone steals their phone then drains their account? Short of calling the bank to complain and put a freeze on their account, there’s no clearcut answer to who’s in the red—the bank or consumer—when an account gets hijacked. 

Some apps cost money. Many bank apps are free, but some will slap users with egregious fees. For example, PayPal charges 30 cents for every transfer made with a debit or credit card, plus 2.9% of the transaction amount. 

Not every app is secure. According to the FDIC, mobile apps have routinely failed to safeguard consumer’s personal info. Sensitive data such as usernames, passwords, and PIN numbers can easily be pilfered by thieves. And let’s not forget that some tools have a dirty little habit of sharing consumer’s information with third-party marketers. 

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