Person-to-person payment methods (P2P payments) are experiencing a surge across all generations.
It’s easy to see the appeal of P2P payments. Transferring money electronically to others, without having to go through banks, endure waiting times and being hit with extra fees, is simpler than traditional payment methods. It’s the modern day answer to the age-old IOU, organised through your ever-present, always accessible mobile device.
More and more consumers are realising these benefits and adopting the new payment technology, with the uptake set to rise exponentially this year. eMarketer predicts that the total US mobile P2P payment transactions will exceed US$120 billion this year, a 55% year-on-year increase. And this figure is set to double in the next four years.
According to the Bank of America’s 2017 Trends in Consumer Mobility Report, more and more consumers are adopting the new payment technology, with the uptake set to rise this year. Interestingly, while it’s millennials who are currently leading the pack in adoption numbers, it is likely this will change with older generations increasingly turning towards the technology.
The recent findings further highlight our shift towards a cashless society and m-wallets. Currently, 36% of Americans surveyed use P2P, with 62% of millennial respondents already avid users of the technology. The later generations of Gen X, baby boomers and seniors then follow suit.
However, the surprising figure is that of those who do not currently use P2P, 49% of baby boomers, 48% of Gen Xers, 47% of millennials and 25% of seniors plan to start using the technology this year.
Currently, P2P payments are primarily used for small transactions, such as paying bills (45%), or spending on gifts (42%), travel (37%), dining (35%) and transport (30%). The majority of respondents who have switched to P2P said it was because of its ease and convenience, while others cited that it was due to encouragement by friends or the bank. Only 16% were ready to give up cash and cheques completely.
With the Bank of America predicting that children under the age of 10 will never use traditional cash, cheques or credit cards, is P2P the way of the payment future?