It’s the P2P Payments Time of the Year
Gift-giving is at its peak during the holiday season, and today’s digital lifestyles have driven shifting mindsets about the best way to shop and give. There was a time when the thought of giving cash as a holiday gift seemed impersonal, if not a little awkward. But times are changing, and gift recipients have spoken: Money for the holidays is perfectly acceptable, if not preferred.
According to recent research conducted by Early Warning Services, LLC, the network operator behind Zelle, nearly 50 percent of U.S. consumers surveyed plan to give money this season, and 58 percent prefer to receive money as a gift. The research also shows that 63 percent of those who prefer to receive monetary gifts plan to use them for things like experiences, bills or personal spending. And for many, money received early in the holiday season helps to finance things they plan to give to others.
Gifting with technology
As consumers have become comfortable with giving money, it’s becoming less necessary to find a crisp fifty dollar bill and a thoughtful card. Technology has helped make that exchange easier to facilitate through enhanced person-to-person (P2P) payment options. Just a few years ago, if you mentioned P2P payments to someone, they might not have known what you were talking about. Consumer adoption was in the early stages at the time, but that has changed.
According to Statista, there were 38.4M adult P2P payment users in the U.S. in 2016, with that number expanding to more than 55M today. That number is expected to further increase to 74.9M in 2022.
Consumer adoption of P2P in the last 24 months has been noteworthy as more and more options to transfer cash electronically have gained market traction, including Zelle, which is owned by a consortium of the nation’s largest banks.
Seasonal P2P payment lift
People’s intention to give money for gifts is playing out in data from P2P payment processors such as Fiserv. The use of P2P over the traditional holiday months increases significantly. Taking a look at Fiserv stats from the 2017 holiday season, some interesting findings became clear. Comparing data from August through October 2017 to data from November and December 2017, analysis found:
- P2P gift-giving rose almost 10 percent in November and jumped nearly 50 percent in December.
- The average amount per gift transaction increased by 26 percent in December.
- The total amount of money moved as gift transactions increased 72 percent in December.
Gifts from the group
Crowd-sourcing has become a popular way to collect funds from a wide range of people to finance things like independent movies, startup companies and even assisting with those who have experienced tragedy. So it’s no surprise that P2P payments have also helped facilitate the crowd-sourcing of gift giving.
According to the same Fiserv data cited above, the most common memo notes associated with P2P gift payments are “teacher gift” and “coach gift”. The rise of P2P options has created the opportunity for parents to easily contribute to a group gift by transferring a specified amount to a point person who will then purchase a collective gift.
While traditional presents with beautiful wrapping paper and elaborate bows will likely never go out of style, there is no question that the stigma of giving money during the holiday season is quickly eroding. Through the advent of P2P payment technology, giving money directly or contributing to a group gift is easier than ever. And for today’s busy consumers, it means being able to give – and get – exactly what they want.
About Jeff McCrory
Jeff McCrory is director of product marketing for Electronic Payments at Fiserv, leading marketing initiatives for multiple digital payment solutions. McCrory began his career in banking over 20 years ago as a direct marketing manager at M&I Banks (now BMO Harris), and later as vice president of direct marketing at SunTrust. He previously held positions at H&R Block, supporting the launch of H&R Block Bank and H&R Financial Advisors (now Ameriprise). Before joining Fiserv, McCrory led the marketing operations team at Intuit Financial Services (now NCR).