P2P Transactions Poised for Breakout

An interesting dichotomy has recently cropped up, as peer-to-peer mobile payments are on track to pose stronger growth, but pure mobile payments apps are starting to see slowing growth. The reports are based on word from eMarketer, and could represent some big changes about to hit the mobile payments market.

P2P operations are seeing steady growth in the United States, the eMarketer report noted, projecting “double-digit growth” through 2021. Given that the growth of P2P will be up 55 percent this year alone over last year—reaching a total of $120.38 billion—the idea of any further growth is staggering. But eMarketer staggers away, noting that that $120.38 billion is on track to double by 2021 alone.

Just this year, it’s projected that 63.5 million adults in the US will turn to a P2P payment app once a month, or more, which represents about a third—32.6 percent—of all smartphone users. While Venmo will have a big chunk of this market sewn up, it won’t be alone. The launch of Zelle, a multi-bank coalition has a major ability to open up P2P operations for a variety of bank and credit union users.

Mobile payments systems like Apple Pay, meanwhile, are being adopted at much slower rates. However, average transaction sizes will be up, clearing the $1,000 average spend per user mark for the first time ever.

This is actually a fairly reasonable response; mobile payment systems have been around quite a bit longer than P2P; it wasn’t so long ago that Venmo was considered a huge security risk before its reinvention. So naturally, platforms that have been around longer see their growth rates begin to slow ahead of platforms that have been popular for less time.

Besides, as we’ve seen here, the growth rate slowing isn’t exactly a huge concern when people are using these to the degree we’re seeing; That and mobile payment systems have long had a major competitor in credit cards, though given the issues with the EMV cards of late, we might well see some more users jump ship.

In the end, the market is a rapidly-changing dynamic, as it’s ever been. With more options coming out and users changing their minds about how they do things, that means opportunity and potential disaster for most every firm in the field.