Digital Person-to-Person Payments in the U.S.: The Competitive Landscape

Providing ubiquity is the key to winning the U.S. digital P2P payments war, says Aite Group.

Boston, May 24, 2017 — According to Aite Group’s latest report, Digital Person-to-Person Payments in the U.S.: The Competitive Landscape, the P2P payments market in the U.S. has become increasingly competitive, with both financial institutions and alternative players entering the market with innovative digital P2P services. Leading players in the industry are reporting double- and triple-digit increases in the volume of P2P payments, U.S. FIs and financial sector tech companies are building interoperable networks that execute real-time payments, and high-tech companies are making a play for a piece of the U.S. market.

Aite Group research shows that most of the larger U.S.-based FIs offer P2P payments solutions via platforms such as Zelle and Popmoney. Meanwhile, alternative providers have designed applications from scratch using rapid innovation techniques. These applications are often dedicated to only the digital P2P payments process, intended to improve the consumer experience by removing friction from the payments process. Despite the emergence of these applications, consumer preferences and lack of ubiquity across different payment channels may be the primary barriers to widespread adoption of digital P2P payments methods.


“In the U.S. today the majority of P2P payments are made using cash and checks, with just 10% of the total P2P transaction volume being made using a digital P2P payments method,” says analyst Talie Baker. “In what Aite Group estimates is a US$1.2 trillion market, there is tremendous room for growth in digital P2P payments as consumers become more familiar with mobile payments and as digital P2P payments solutions become more ubiquitous,” she says.

This Aite Group Impact Report provides an in-depth analysis of 11 U.S. digital P2P payments services: Circle, Facebook Messenger, FIS People Pay, Fiserv Popmoney, Google Wallet, PayPal, Payveris PayItNow, Square Cash, Tilt, Venmo, and Zelle. It is based on Aite Group interviews with 23 executives from leading organizations, including both FI and alternative providers of digital P2P payments services, from October to December 2016. It is part two of a two-part series examining the digital P2P landscape in the U.S.—find the first here.
 


About Aite Group:
Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, we guide financial institutions, technology providers, and consulting firms worldwide. We partner with our clients, revealing their blind spots and delivering insights to make their businesses smarter and stronger. Visit us on the web and connect with us on Twitter and LinkedIn.

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