February 16, 2016
P2P payments used for more than splitting the bill, says Auriemma Consulting Group
NEW YORK, NY -- Person-to-person (P2P) payments are increasing in popularity and diversifying in use, with nearly one-third of consumers currently utilizing the service, according to recent research by Auriemma Consulting Group (ACG). The firm's latest Cardbeat surveys, among 800 US credit cardholders, found that users report several practical uses for P2P payments other than just splitting the bill---many citing transaction speed and ease of use as reasons for the preference.
Users agree that P2P payment apps make it easier to pay people far away (94% agree), to keep track of money owed to friends and family (81%), and to split checks or bills (80%). "It isn't just used to pay for your share at dinner anymore," says Jaclyn Holmes, the ACG senior manager who directed the studies. "The ease of paying people far away suggests users may utilize P2P payments as an alternative to sending checks, money transfers, or providing account information to pay for goods or services." P2P users also seem to enjoy flexibility in how they pay, with nearly one-half of users linking multiple accounts to a P2P app. Most users link credit rather than debit cards to their P2P apps, consistent with consumers' preference for using credit cards for online purchases.
Among all respondents, familiarity was highest with PayPal Me (27%), Square Cash (17%), and Facebook (14%). While Venmo was the fourth most familiar among cardholders overall (12%), more than a quarter of Millennials (26%) cited familiarity with the brand. Those familiar with a P2P payment app commonly cite online advertising, word of mouth, and social media as how they first heard of the payment platform. "From a marketing standpoint, the very nature of P2P is that it encourages you to promote it to your friends," said Marianne Berry, Managing Director of ACG's Payment Insights team. "Users, by necessity, often bring other new users with them: more than two-thirds of users under age 35 reported that they've encouraged friends to sign up for a specific P2P app."
These findings are consistent with a recent issue of ACG's The Payments Report, a survey of 500 debit cardholders, which revealed that 85% of those who used at least one P2P payment app/service were at least somewhat likely to recommend the app/service to a friend. The study also found that 38% of the same population have used the service to pay someone other than a friend, suggesting that P2P payments are not simply just for splitting the bill at dinner, but may prove a more useful form of payment for those who prefer the method over cash or checks.