Driven by Zelle And Apple, Mobile P2P Will Hit $244 Billion by 2021, Forecast Says

The forecast for person-to-person mobile payments is a heady one. Expect double-digit growth through 2021, says research firm eMarketer Inc. As more consumers adopt the growing number of P2P payments services, the value of their P2P mobile transactions will increase to $244.03 billion, up 103% from the $120.38 predicted for 2017.

Why such strong growth? The debut of Zelle,the bank-backed P2P network is one reason, says Cindy Liu, an eMarketer forecasting analyst. Zelle’s network of more than 30 banks and credit unions, which collectively account for more than 86 million customers, is going up against P2P powerhouses like PayPal Holdings Inc.’s Venmo, Square Inc., Facebook Inc., Google Wallet, and the upcoming P2P payments service from Apple Inc.

Liu’s data shows that as P2P transaction amounts increase, the rate of growth will ease. For example, in 2018 eMarketer says the value of P2P mobile payments will increase to $156.49 billion, a growth rate of 30% from 2017. By 2021, the growth rate will slow to 13%.

“It is natural to see fast growth for markets in their formative years and then slowing growth as the market matures,” Liu says in an email message. “Growth will naturally slow to double digits from 2016 through 2021 since the base is larger and growth decelerates. This is expected as the amount of new P2P users added each year gets smaller and smaller.” Even though growth rates may decrease, the transaction value will more than double from 2017 to 2021, she says.

The impact of Zelle, which is rolling out now and into next year, and the coming Apple P2P service will help drive consumers to P2P services, she says.

“New P2P entrants such as Apple—which is a trusted brand and has a strong brand following, and Zelle network—which benefits from a large potential audience of mobile banking users, will help drive new users and ultimately drive the value of the mobile P2P market,” Liu says. “This is especially the case since older consumers and those who are concerned about online security have yet to try mobile P2P payments and are more likely to try it if it was being offered from their trusted financial institutions. And as consumers become more comfortable making mobile P2P transfers, the value of each transaction should increase.”

In 2017, 32.6% of U.S. smart-phone users will use a P2P payment app at least once a month, eMarketer says.

Liu’s report also looked at proximity mobile payments, such as those made with Apple Pay, Samsung Pay, or Android Pay. The average annual spending per user is forecasted to be $1,026 in 2017, marking the first time that amount has gone higher than $1,000, she says.

EMarketer predicts that the total transaction value of such payments will increase from $49.29 billion in 2017 to $189.91 billion by 2021, a 285% increase. Mobile-payments adoption continues to be hampered by consumer preference to use credit and debits, and a lack of merchants using compatible point-of-sale equipment.