Peer-to-Peer Payments: fueling commerce in the Millennial generation

We’ve all been there. At a restaurant with friends, the check arrives, and it becomes a scramble to figure out how to split the bill and have everyone seamlessly contribute their part of the expense. Friends start passing around credit cards, exchanging cash, making I-owe-you promises … In short, cumbersome & inefficient. Wouldn’t this all be far simpler with a peer-to-peer solution that allowed consumers to transfer funds back and forth to each other via phone? Thankfully, that future is on the very near horizon, and new technologies like #dataoveraudio are helping to make those transactions secure, and frictionless.

Mobile payments & mobile finance are on the rise worldwide, particularly among the younger millennial generation. Experts across the board are anticipating massive market growth with the mobile P2P space estimated to rise to $336 billion by 2021. P2P apps are changing consumer purchasing behavior, with nearly half (46%) of smartphone owners now using these apps. In a recent study, Juniper Research found that by 2021, nearly 3 billion users will access retail banking services via smartphones, tablets, PCs and smartwatches.

This growth isn’t limited to the US and banking, it’ll spread far and wide geographically and through new applications. In India, for example, WhatsApp users can already use P2P payments to send money to friends during online chats. That test has already netted 1 million users in just a few weeks! Apple is implementing this feature with Apple Pay Cash, and P2P payments will soon reach voice-activated technologies like Alexa that are growing in popularity globally.

Who is using P2P payments? Growth is fueled by younger millennials, the “digital-savvy, mobile-oriented nature of that generation, which tends to use their phones for more functions.” Currently, P2P payments refer primarily to “informal” payments made amongst individuals and center around lower-value transactions such as splitting a bill at dinner, or reimbursement for a one-time payment. Over time, as users become more comfortable with the technology, usage is forecasted to expand from smaller payments to higher-value transactions. In fact, 26% of consumers feel that no amount of money is too high for a P2P transaction, indicating that P2P services could gain traction among more “serious” offerings, like rent or bill payment,

With all of the growth trajectory, are there impediments? The main challenge is that P2P payments are seldom profitable for the vendors that offer them. Payment apps and retailers take on mobile P2P at a loss because it’s a low-friction way to drive user adoption of P2P services. This means that, over time, monetization becomes paramount. Keeping costs down will be essential, and technology solutions with little to no implementation costs will be key in this regard. At LISNR we are excited to address this challenge head on through our software solution for P2P payments. Using #dataoveraudio transmission between devices, payment data can be exchanged, enabling frictionless payment from one device to another, or from one device to many. Our #dataoversound solution is simple to implement, and requires limited investment in incremental hardware or development.

LISNR’s seamless solution will enable more and more apps and vendors to take advantage of the growing P2P trend. To learn more about how LISNR’s solutions can help your business, get in touch!

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