An Approaching P2P Payments Upswell?

A survey for megabank Bank of America Corp. indicates that consumers of all ages are ready to embrace electronic person-to-person payments.

BofA’s latest Trends in Consumer Mobility Report, released last month, found that 36% of all respondents use a P2P payments service. Market-research firm Convergys queried for the bank 1,005 U.S. adults who have a bank account and a smart phone, as well as 407 consumers who use a P2P service.

By generations, 62% of younger consumers—those between 18 and 34 years old—used a P2P service, compared with 34% of those between 35 and 52 years old, 20% of those 53 to 71, and only 10% of those age 72 or older.

These usage rates, however, are expected to increase. Of those not currently using a service, 47% of the youngest generation anticipate doing so by the end of 2017, while 48% and 49% of the next two respective generations will. Fully 25% more of the oldest generation plan to begin using a service.

The survey also asked about comfort levels concerning amounts sent or received. Apparently, there is no high or low end in many consumers’ minds. When asked what would be the lowest amount of money they would request through a P2P payment service, 36% said no amount was too low. Asked the highest amount they would be comfortable sending, 26% said no amount was too much.

Charlotte, N.C.-based BofA is one of the big banks that own Zelle, a P2P service that is rolling out nationwide this year (“The Contest Over P2P,” February). BofA already incorporates some aspects of Zelle in its P2P service.

BofA also asked why consumers use P2P payments services. Forty-five percent said it was to pay bills and 42% said for gifting.

Banks have significant interest in persuading consumers to use their P2P payments services versus the likes of Square Inc.’s Square Cash or Venmo from PayPal Holdings Inc. But banks must make the service more widely available within their digital offerings, Javelin Strategy & Research, a Pleasanton, Calif.-based advisory firm, stressed in a report earlier this year.

BofA says it has more than 22 million active mobile users. During 2017’s first quarter users made more than 29 million mobile bill payments and almost 9 million P2P transfers, a tally that is 76% greater than in 2016, the bank said.

—Kevin Woodward