December 17, 2009
Person-to-Person Electronic Payments Grew During the Recession and Are Now Ready for Larger Growth
Consumer Research Shows Doubling Of P2P Transactions in Last 12 Months
San Francisco, CA, December 16, 2009 - Person-to-person (P2P) electronic payment transfers will grow rapidly over the next five years, according to a new Javelin Strategy & Research (www.javelinstrategy.com) report. Javelin data found P2P activity doubling in the last year, and now projects high growth through 2014. Leading financial institutions are expected to take advantage of the opportunity through serves that work on smartphones, and especially the Apple iPhone.
The Javelin report, 2009 Trends in Multi-Channel Account-to-Account Transfers and Person-to-Person Payments, examines the potential of and growth in new transfer alternatives, such as online and mobile channels, for person-to-person (P2P) transfers. The report also includes a five-year forecast of the U.S. household market for online P2P transfers, online inter-institution account-to-account transfers, and wire transfers sent using a bank or credit union or a retail service such as MoneyGram or Western Union. To compile the report, Javelin interviewed four vendors, including CashEdge, Obopay, Fiserv and Fidelity.
As an example of new trends among P2P transfers, Javelin specifically comments on PayPal. "PayPal's substantial transaction growth over the past decade has been rooted in business-to-consumer transactions rather than true P2P," said James Van Dyke, President and Founder "But back-office alliances with vendors such as Fidelity Information Systems and S1 will allow consumers to use these types of services through their phones as a secure combination of wallet and a 2-way pager."
Key Findings—2009 Trends in Multi-Channel Account-to-Account Transfers and Person-to-Person Payments Report:
Online bankers move funds more, with research showing they recently used account-to-account banking transfers at a rate that is triple that of all other consumers.
Mobile P2P payments users will expand significantly over the next several years, but due to limited "P2P coverage" (places to use these services) consumers must still expect some obstacles.
Global cross-border and remittance transfers growing are among the fastest growing online, mobile, and multi-channel P2P services. "In the dot.com period many early P2P payments initiatives failed due to limits on consumer and industry readiness, compounded by unforeseen transaction risks," said Mary Monahan, Managing Partner and Research Director. "But in the interim, consumers began electronically moving funds between their own accounts at the same institution, forming a foundation for determining secure parameters for inter-institution online transaction risk. More banks and vendors are moving into the picture, and we expect continued growth through 2014".
About Javelin Strategy & Research
Javelin provides superior direction on key facts and forces that materially determine the success of customer-facing financial services, payments and security initiatives. Our advantages are rigorous process, independent position, and expert people. For more information about this or other Javelin reports, please visit www.javelinstrategy.com/research or contact Elizabeth Travers at (925) 225-9100 ext. 31 or etravers@javelinstrategy.com.
Note: To arrange an interview with Mr. Van Dyke, Ms. Monahan and/or view research on this topic or a similar topic (available to qualified members of the press), please contact Crystal Mendoza at +1.925.225.9100 ext. 35 or cmendoza@javelinstrategy.com.